Courtesy of Chris Kimble.
We live in a highly correlated world when it comes to stock market trends!
Last week as the Dow was falling 1,000 points a week ago today, the Power of the Pattern reflected that many of the key markets around the world were hitting 4-year rising channel support at the same time.
I shared on 8/26, that the “Global bull market was still intact!” ( See Post Here)
Did many of you tell your friends a week ago today…”Hey the Dow is down 1,000 points, don’t worry about it, by week end, the markets will close the week out on a positive note?
From a leadership perspective, what markets seem to be in the leadership role? Who is the leader of the pack and whom should we follow?
Last October I gave a presentation at Stocktoberfest, at that meeting I shared that what the DAX did going forward should have a large impact on the S&P 500. I feel the same today as I did last October, that the DAX remains in a leadership role and what it does will have important impact on the markets in the states. I will be updating this chart at Stocktoberfest again this year, love to see you there!
CLICK ON CHART TO ENLARGE
The chart above highlights that the DAX hit rising channel resistance in April of this year. As the DAX was hitting this resistance line, guess what the NYSE Advance/Decline did at the same time? It peak and started moving lower, diverging against the S&P 500 for a few months, sending a concerning signal to the S&P 500 and other indices in the states.
The DAX like many other indices created bullish reversal patterns (bullish wicks) at rising channel support last week.
I humbly feel that what the DAX does at rising channel support will have a large influence over the S&P 500 in the next few weeks.
Key an eye on this leading index in the short and intermediate term!!!
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