Technical Perspectives: Global Markets Starting To Un-Hinge

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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