In light of Trump’s attack on Iran’s nuclear capabilities over the weekend and this morning’s little pump in USD, I thought I would reprint the Global Stock Markets segment from this week’s edition of Notes From the Rabbit Hole, NFTRH 868.
Before getting to that, here is USD’s current situation in pre-market, bouncing but contained below the downtrending SMA 50.
Global Stock Markets (daily charts)
Global (ex-US) looks like it wants to decline to test the 50 day average and/or support below it (gap at 56.38). As with US indexes, I see that stab below the 2024 low as a potential bear market harbinger.
The ratio to the US market is getting interesting. ACWX/SPY rolled over last week but clung to a higher low to the May 16 low. Take that out and we could have a phase of “America great again” or “America less bad” than the balance of the world from a stock market technical perspective.
It would be logical for the US dollar to play a role here. While some markets, including gold, are sporting negative RSI divergence, old Uncle Buck made a positive one at the recent low of 97.60. May be nothing. May be a global market rally ending (or interrupting) something.
Given the view that the herds have been generally over-bullish on markets, and the close proximity of these markets to upside targets, we should watch the USD divergence and any signs of strength in the buck.
However, Canada’s TSX-V is another indication we are following and it is merely rolling over in a normal pullback. If Momentum on TSX-V’s speculative components is going to continue short-term the index should hold the 704 area or take a quick flash down to 680 (our old upside target, now support). Fill some gaps and refuel.
If I don’t see momentum resume at/above the 704 area I will probably release a few more items. I took profits on a couple .V listed things last week and tried to trim AMEGF (AE.V), but its bid dropped out from under me just as I was preparing to do so. The profits were just too good not to take some. Emphasis on “were”.
NFTRH 868 then logically transitioned from TSX-V to the very much related commodity complex to update the view there.
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