The Chart The Whole World Is Watching

Okay, so maybe the whole world isn't watching the New York Stock Exchange Composite Index. But they should be. While everyone is busy arguing about rate hikes and greece and at Nasdaq 5000, the real breakout we should be discussing is what is likely to occur in the good ol' NYSE Composite. You see, this is a market-cap weighted index, meaning that the largest companies represent a larger percentage of the components in the index. While many of the popular indexes are similarly weighted, more than half of the biggest 100 companies in this particular index are based outside of the United States.

The global implications of a breakout in the NYSE Composite Index could be massive. We're not just talking about a breakout in U.S. small-caps or mid-caps, we are talking about a much more international index with companies based all over. Here is what the chart looks like:

The way I see it, the more times that a level is tested, the higher the likelihood that it breaks. It's like if you punch someone enough times, maybe the first few times they can take it, but if you keep hitting them, eventually they will fall. It works the same way in the markets. We are patiently waiting for an upside resolution here. If we are to break out above all of this overhead supply, globally it would make it hard to be bearish bigger picture.

So maybe the whole world isn't watching this. But perhaps they should be.

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Tags: $NYA $SPY $IWM $MDY $NYX