Saturday 5 October 2019

Weekend update - World equity markets

It was a bullish month for world equity markets, with net September gains ranging from +5.7% (Japan), +4.9% (Spain), +4.1% (Germany), +3.6% (Brazil, France), +3.1% (Russia), +1.9% (USA), +1.5% (Australia), +0.7% (China), to +0.04% (Greece).

Lets take our regular look at ten of the world equity markets

USA - Dow

The mighty Dow settled +513pts (1.9%) to 26916. Monthly price momentum ticked upward, but is still moderately negative. There remains a monstrous divergence in various technicals to price, that stretches back to January 2018.

Note the key 10MA at 25836. The m/t trend from Dec'2018 will be seen as bullish, unless a monthly settlement under it. Any such bearish monthly settlement would offer the lower monthly bollinger in the 23400s.

*as at the Oct'4th close, the 10MA stands at 26161, with the lower bollinger having slightly climbed to 23433.

Germany – DAX

The economic powerhouse of the EU - Germany, saw the DAX +488pts (4.1%) to 12428. Monthly price momentum turned positive for the first time since Feb'2018. The remains a monstrous technical divergence that stretches back to early 2015.

Japan – Nikkei

The Japanese market settled +1174pts (5.7%) to 21878. Monthly price momentum ticked upward, but remains seriously negative. There remains a monstrous technical divergence that stretches back to summer 2015.

China – Shanghai comp'

Chinese equities settled +18pts (0.7%) to 2905. The Sept' candle is spiky on the upper side, and it leans at least s/t bearish. Monthly price momentum remains fractionally positive.

Brazil – Bovespa

Brazilian equities gained 3607pts (3.6%) to 104742. Monthly price momentum remains very positive.

Russia - RTSI

Russian equities settled +40pts (3.1%) to 1333. The Sept' candle is spiky, and leans s/t bearish. Core support is the 1200 threshold.

France – CAC

The CAC saw a net Sept' gain of 197pts (3.6%) to 5677. The intra high of 5696 was the highest level since Dec'2007.

Spain – IBEX

The IBEX gained 431pts (4.9%) to 9244. Monthly price momentum ticked upward, but remains fractionally negative.

Australia – AORD

Australian equities settled +102pts (1.5%) to 6800. Price action is increasingly from the recent historic high of 6958.

Greece - Athex

The Greek market settled +0.3pts (0.04%) to 868, with a mid term marginal double top of 895/901.


All ten world equity markets settled net higher for September.

Japan and Spain lead the way upward, whilst Greece managed a fractional gain.

All ten markets settled above their respective monthly 10MA. 

Looking ahead

Earnings: DPZ, LEVI (Tues'), DAL, WBA (Thurs').


M - Consumer credit
W - JOLTS, wholesale trade, EIA Pet', FOMC mins (2pm)
T - CPI, Weekly jobs, US T-budget, Fed balance sheet (4.30pm)
F - Import/export prices, consumer sent'.

Final note

September was certainly a bullish month for world equities. We saw the ECB cut rates by -10bps to -0.5%, with Draghi even spinning up the printers, with monthly QE of €20bn.

October has begun on a somewhat weak and choppy note. We can expect rate cut'3 from the US branch of Print Central this Oct'30th. If you think lowering rates is going to help stave off a recession, I suggest you stare at the following for a good hour...

*the above chart is an 'end of month' chart, rate cut'2 hasn't yet been factored in.

Even the mainstream cheerleaders are coming around to the notion this is not 'mid cycle'. The manufacturing sector is decisively recessionary, with the service sector distinctly weakening toward recessionary thresholds. GDP and employment data will be the last type of data to reflect a recession, and by then, some world equity markets might have already been cut in half.

On a positive note, the retail trader/investor can look forward to selling at the lows in 2020/21 for zero commission.

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Have a good weekend
*the next post on this page will likely appear 5pm EDT on Monday.