Monday , 14 July 2014

Global Stock Markets At Key Resistance Lines – Will They Break Out or Crash?

Markets around the globe are all facing key resistance levels at the same time. Can they pull a “Great Escape” and bust stock marketthrough? Yes they can and if they do, it would be very bullish for equity markets around the world [and if they don't, then watch out below!].

So says Chris Kimble (blog.kimblechartingsolutions.com) in edited excerpts from his original article* entitled

 [The following is presented by Lorimer Wilson, editor of www.FinancialArticleSummariesToday.com and www.munKNEE.com and the FREE Market Intelligence Report newsletter (sample here – register here). The excerpts may have been edited ([ ]), abridged (…) and/or reformatted (some sub-titles and bold/italics emphases) for the sake of clarity and brevity to ensure a fast and easy read. This paragraph must be included in any article re-posting to avoid copyright infringement.]

Kimble goes on to say in further edited excerpts:

At the same time the Dow is facing the resistance lines at 16,000 several other key and broad based U.S. index’s (NYSE, Wilshire 5000 & Russell 2000) are facing long-term resistance lines dating back many years, and all at the exact same time. The Dow, for example, (as shown in the  upper left chart below) in addition to facing the key 16,000 resistance level is up against another key line dating back to the 1987 highs.

KimbleFigure3.jpg

 

(For those readers not familiar with the movie The Great Escape it was a 1963 American film about an escape by Allied prisoners of war from a German POW camp during World War II, starring Steve McQueen.)

A look around the world (see charts below) shows that many key markets are attempting a “Great Escape” from their own key resistance levels and have created bearish rising wedge patterns, which suggest that two-thirds of the time…[levels] will move lower in the near future.

 

KimbleFigure2.jpg

Granted resistance is resistance until broken but if Janet and the Fed can help investors break these resistance, it would become a “Global Breakout” which would be very bullish for the markets.

A break of resistance is important because according to the q-ratio below (a fundamental valuation tool), all but one major top in the Dow over the past 100-years took place when the ratio was within 5% of current readings!

KimbleFig4.jpg

Another look at why a “Great Escape” is important is that the NYSE could be putting in a “Double Top” that is almost the exact opposite of the Double Bottom it put in years ago.

KimbleFig5.jpg

We live in a highly correlated world so it’s important for world markets that that they pull a “Great Escape” right now, at this key technical set up!

 [Editor’s Note: The author’s views and conclusions in the above article are unaltered and no personal comments have been included to maintain the integrity of the original post. Furthermore, the views, conclusions and any recommendations offered in this article are not to be construed as an endorsement of such by the editor.]

*http://www.traderplanet.com/articles/view/165559-can-the-markets-post-a-great-escape-5-key-charts/ (Copyright © 2013 TraderPlanet.com, LLC. All rights reserved.)

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