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Key Global Equity Index Has Fallen Off The Precipice
On September 8, we posted a chart showing how a key worldwide equity index – the Global Dow – was “hanging on the precipice”. To refresh, the Global Dow is an equally-weighted index of the world’s 150 largest stocks. Therefore, while it may not directly be the target of a lot of money changing hands, it most certainly represents the stocks that see the most money trading hands. Thus, The Global Dow is a fairly important barometer of the state of the global large cap equity market.
The “precipice” that we referenced in the September 8 post was the UP trendline from the bull market bottom in 2009. Not surprisingly, the index did attempt to climb up off of the precipice in the weeks following the post. However, as we suggested, “another test of the precipice here at 2280 would not be surprising”. The Global Dow did return to test that area and is now officially off of the precipice – having fallen down off of it in the last few days, as the following charts illustrate.


Additionally, as the charts indicate, the post-2009 UP trendline also coincided with a cluster of important Fibonacci Retracement levels shown below. Therefore, this breakdown wasn’t just about the trendline but a myriad of significant levels, making it even more consequential.
- The 23.6% Fibonacci Retracement of the 2009-2014 Rally ~2291
- The 38.2% Fibonacci Retracement of the 2011-2014 Rally ~2284
- The 61.8% Fibonacci Retracement of the June 2013-2014 Rally ~2275
So what is the practical significance of this breakdown? In the immediate-term it opens up more downside as we wrote in the September 8 post:
Should the Global Dow fail to hang on the precipice here, the next major level of logical support would come in at the next sequence of Fibonacci Retracement levels in the 2050-2070 area, or another 10% lower.
However, more significant is the fact that this is one more in a rapidly growing list of examples of indexes around the globe that are breaking long-term UP trendlines and other significant levels of various magnitude. Each and every day, we are witnessing the ongoing global selloff inflict more and more damage to the post-2009 cyclical bull market. And while that bull may not be declared dead for some time, it is now being wounded enough daily to warrant very seriously considering that possibility.
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nice, let it evaporate.
Good, keep up the slide
<-- Charts, Meh!
<-- Charts, Yay!
Anyone looking at charts in this goal-seeked, tape-painted, PPT-managed world should consider tea leaves or entrails... The charts will show exactly what they are designed to show... nothing more, nothing less.
Regardless of whether or not YOU look at the charts as garbage does not mean that everybody else does.
When the crowds are reading the charts, believe in them, and then FOLLOW THROUGH and make Financial Decisions upon them, the Markets will move accordingly.
Even the algorithms are PROGRAMMED into those machines, using Math and Logic, suggesting or executing trades based upon the garnered numerical data from those charts.
Oh I agree that the Markets are manipulated and are far from free.
But the crowd may not see that reality as far too many are asleep.
Looking at Member Sentiments on Investor.com a stunning 42% are still Bullish?!
Now you can choose to believe whatever you want. I do not care.
And as i am NOT a participant in these fraudulent markets and I am just a spectator to this debacle, it costs me nothing.
You can deny reality and live in a Fantasyland of "should be", "would be", and "could be" if you so shall choose.
Yes perhaps people should realize that the Market is rigged. The reality is that most do not.
Yes perhaps the people culd be aware that the Government props those Markets up. The reality is that most do not.
Yes perhaps the peoplewould be aware that there is rampant fraud and corruption in the Market.. Unfortunately the reality is that most are not.
You can live in your fantasyland. I will deal with reality. Let's see which strategy is successful.
Well fuck me... didn't realize you're having your period.
I never said anything about Fantasyland, or suggested "should be", "would be" or "could be". You must be projecting.
I suggested (strongly) that the charts are are used to tell a story. They are used to drive behaviour. That is all -- although you seem to acknowledge my point. Draw your own fucking inferences and invest (or not) as you choose.
The (much) broader question is to ask: What do the people who manipulate (your word) the markets WANT you to think? Answer me that and I'll have a suggestion on how/what to invest.
Glad to know the "World According to Tall Tom" is so black-and-white. Simple things for simple minds, I suppose. Why don't you go make another gold candelabra or whatever the fuck you do?
Pretty testy this morning, AI.
TT's point, that tea leaves or not, charts do influence a lot of investors and HFT algos, so they are worth paying some attention to. I'm a fundametal investor, but on my spec stuff on the side, I read the chartists bullshit, because a lot of other people and algos are reading them, and short term behavior can be and is influenced by them.
And do you have any skin in the game? I have lots, and it makes you a pragmatist, or broke, and I ain't broke.
Tall Tom's post was reasonable - your flare up not so much.
you people are SOOO FUCKING CYNICAL! why all the Negative Karma in an Obvious Recovery? (good Lord) just go to Walmart and buy some cheese puffs.. Foot Ball is on!
And don't forget to post about it on FACE BOOK! LOL!!!!
Global Wealth Destruction that will make your eyes water
Degree of '09 trendline changes between charts? Why?
Because of the expanded x-axis, causing the slope to flatten.
Double seasonally residualize that bitch!
Practice independence. If THEY let you, that is.
"It can't happen here". Said every collapsed civilization, ever. Ok, so it is more slowly circling the drain.
ZH,
Just wanted to call your attention to the fact that according to my calculations, Dec Nasdaq 100 futures just did a "death cross" today. Simple 50-day moving average just fell below simple 200-day moving average.
Thought that might be worth an article.