Technical Perspectives: Global Markets Starting To Un-Hinge

Tyler Durden's picture

Submitted by Chris Capre of

Global Markets Starting to Un-Hinge

As this market has been feeling like a bubble waiting to find a pin as the wheels come off Fast and Furious, everything across the board is getting hammered from pillar to post and starting to scream out a major sell-off is coming to a market near you.

When the 2007/08 global recession started, the DJIA led the declines with the DAX following suit after.  But this time those across the pond seem to be the dying canary in the coal mine.  Today, the DAX is down 4.64% on the day and 32% from the highs of the year.

On a sign of weakness out of China through the 2mos low on their PMI, the Hang Seng closed down 4.85% on the day and is about to have its largest single weekly loss since 2009 while being down 28.5% for the year. 

The DJIA is also getting crushed as it is now down 16.4% from the 2011 peak while also being on the verge of a single largest weekly point drop from an open to close basis.

What is ironic about all this is the DJIA, SPX, FTSE, and DAX are on the verge of making yearly lows and they all look vulnerable beyond belief.  Basically the markets are starting to completely un-hinge and we suspect the wheels are coming off shortly (see chart below)


If anyone from the lineup above makes new lows for the year, this will likely increase the sell-off in global indices adding further negative sentiment to traders (as if they needed any more).

What is most interesting is from an Ichimoku perspective, all four of them are now below the weekly Kumo which is a very bearish sign for any one of them.  When was the last time since 2001 we had all four below the weekly Kumo?  Jan. 2008 and we all know what happened from there. 




If one index was below the weekly Kumo, then that would be a bearish sign in regards to that specific index.  But all four suggests contagion as it looks like we are on the verge of a massive sell-off in global indices which ironically is looking eerily like 2008 all over again.

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SheepDog-One's picture

Cool charts, I put them under the monitor lizard enclosure black lights...awesome.

Release the Kraken, abandon ye all hope, yadda yadda....

TruthInSunshine's picture

The action is broad and swift, just like it was back in 2008 - I remember those days well - except the fed funds rate was over 5% back then, which meant that The Bernank could cut rates about 19 times before getting to today's 0.25% fff, and Bernanke/Geithner/Paulson had not yet royally pissed off tens of millions of Americans by making false claims to transfer 5.2 trillion of taxpayer money to Wall Street & Banking Interests yet.

This isn't like 2008 at all, now that I think about what I wrote above, and with the very adverse bonuses of China contracting, the EU about to disintegrate (nothing will stop the political and cultural and economic rifts from growing greater over there), the banks still saddles with so much septic waste, and governments now loaded beyond the maximum weight of sovereign debt, doing the binge and purge; it's 10x worse than 2008.

redpill's picture

Them Bollinger Bands are starting to look like columns of projectile vomit.

11b40's picture

Yes. it is very much worse than 2008, Sunshine

As someone who swing trades with a short bias, I cleaned up in 2008....I mean REALLY made a killing between 2/08 & 3/09.  It was a long, bumpy ride, precisely because of many of the reasons you cite.

Now, I really don't know what to do.  This thing feels like it could just drop like a rock, leaving no time and no room to trade it (unless you can watch screens all day, which I can't do).  I went short again in July, and tightened stops on leveraged ETF's Tuesday.  Nothing stopped out.  These past 2 days popped me way up, & I want to take profits...but I see far more room on the downside & very little to give this market an upside bounce, until, or unless, the printing press is turned back on. 

This has the makings of an International finacial tsunami where everything is suddenly washed out....and forever changed.  We are truly in uncharted waters.


Joshua Falken's picture

Today is the day

look at The Global Dow index


the Dow Jones Transpotation Average see

this is finally delivering Richard Russell's Dow Theory resumption of the primary bear trend  

TruthInSunshine's picture

Equity markets are back, on a nominal basis, to where they were 13 years ago, and on a real, inflation-adjusted basis, to where they were 26 years ago -

- and this doesn't even count the trillions in 'equity value' that went to $0 or pink sheet level, with those stocks being tossed out of the major indexes (ahem, part of the fraud that is the equity investing game), that aren't now even counted in the carnage tally, such as when General Motors was tossed out of the Dow, ultimately to reach $0, with the Dow being 're-jiggerd' (as it has so many other times) otherwise called 'survivorship bias (the "dirty" topic Jeremy Siegel will try and avoid speaking of at all costs).

Joshua Falken's picture

Have a look at Japan's Nikkei 225 which is 78% below its all time high 22 years ago

Remember also that the Dow Jones Industrial Index took until 1954 (25 years) to make a new high after the 1929 Wall Street Crash.

Global equity markets have only just started to price in the largest and most widespread debt crisis in the history of the planet.

When the S&P 500 finally bottoms out at 330 on a 6x PE in 2020, then we will be on the road to recovery



TruthInSunshine's picture

And you're pricing the Nikkei decline in nominal terms, too.

In inflation-adjusted terms, the Nikkei is probably down 94%+ from its 1989 peak.

The Vapors - Turning Japanese - YouTube
11b40's picture

Great points again, Sunshine.

If we could get you a slot on CNBC, you would be a big hit!

Or, maybe you should be on that new FOX financial station.  After all, they are fair & balanced, right?

Seriously, your summation above should be explained to everyone who even thinks about 'investing' in today's rigged stock market.

harposox's picture

Perfect – a dark voice for dark times.

Executioner's picture

Awesome indeed SheepDog, you might like this

For those Germans out there, also check the DAX.


Little John's picture



In what is being called conciliatory gesture Fed Chairman Ben Bernanke has called for a meeting with Republican presidential candidate Rick Perry.  The outreach from  Bernanke comes as a surprise in light of Perry’s recent allegation that the Chairman’s monetary policies were “treasonous”. When asked the purpose of the meeting Bernanke said he just wanted to clear the air between the two,  and explain some of his policies.  “I’d also like to get his help in organizing one of those mass prayer things” said Bernanke.

SheepDog-One's picture

'Mass prayer' Bernank and all the other reptilians are off the coke and 16 year old hooker kick for now then?

SheepDog-One's picture

So Bernank wants to explain his policies to Perry....I wonder when Bernank will get around to explain his policies to the entire rest of the world?

DaveyJones's picture

Poor Ben. it's hard to explain what you don't understand

espirit's picture

It's about time for the wheels to come off, the tires were shredded along with the SEC documents long ago.  Can't keep riding on those Chinese rims at this velocity.

Crash, bitchez.

YesWeKahn's picture

The problem is that Perry doesn't speak Monkayish.

Bicycle Repairman's picture

Bernanke is just in the process of educating Parry, and anyone else who objects to printing, on why Bernanke prints i.e. one giant market crash.  Bernanke can count on the assistance of countless numbers of Parry constituents in the education process.  Expect a retraction from Parry in 3,2,1..........

Bicycle Repairman's picture

To my junker:  you may not like it, and I might not like it, but it is the way of things.  No politician is going to save you a$$.

Mr Lennon Hendrix's picture

I'll be buying silver at $33 with both fists.  If it moves to $28, I'll go all in.  This is just so fucking awesome!

Montgomery Burns's picture

Any idea who will be selling phys at those prices? Paper silver price down big today but actual purchase price ,not so much. (apmex ,gainesville)

tmosley's picture

Let's hope the physical prices come down.  As a buyer, I want to get the highest amount possible.  

scrappykoala's picture

Ummm wow you guys are willing to pay that much over spot??? Why? Go to a coin show some of them are a buck over spot which is practically the same thing. At most 3bucks above spot. Hell coin dealers. I never bother with the online stuff because their selection and prices are ridiculous plus thats a paper trail. Coin show no paper trail and close to spot.

LookingWithAmazement's picture

I'm optimistic that the markets will regain shortly. Problems solved, no Armageddon.

DaveyJones's picture

That's the thing about optimism, it's not evidence 

Mr Lennon Hendrix's picture

You are mistaking optimism for stupidity, my friend.

InconvenientCounterParty's picture

Optimism and empathy are evidence you are human.

Stand in a circle and liberate the person on the left.

SheepDog-One's picture

Youre optimistic that markets will regain....Im certain the only tool they have is money printing, which is a total disaster and rejected by the world now. 

Bubble 50 P/E markets set for USMC boot camp haircut.

LynRobison's picture

Hopium is a strong drug, and you are apparently an adict.

fuu's picture

I must admit I was wrong yesterday calling your "gold will go down because no more bubblemoney is flowing in" comment the stupidest thing I had ever read on ZH. This post is the stupidest thing I have ever read on ZH.

mayhem_korner's picture

I am going to join the mia culpa bandwagon.  I said yesterday "wait until tomorrow" on gold.  Complete miss.


Wait a week or two, then... :D

tawdzilla's picture

the markets will tank, the Fed will intervene, back to regular scheduled programming

Mr Lennon Hendrix's picture

The waiting is the hardest part

-Tom Petty

Edward Fiatski's picture

Look out below, the inverse coil spring is aboot to come undone!

Helvidius's picture

Just so I'm clear, this is bad, right?

WonderDawg's picture

Not if you've been expecting it.

And Depends is what RobotTrader is soiling right now.

pain_and_soros's picture

I thought he was referring to being prepared with a well-stocked closet of those adult diapers....

RockyRacoon's picture

That would be a good commodity to stock up on, as well as other hygiene products!