[Premium] Three Charts For The Week Ahead
Let's move into this week's topics.
1. The first chart is an exact replica of last week's. That's how important the S&P 500 is to global equities right now. If prices cannot stabilize at their former highs at 3,330, then this turns into a failed breakout and the world's leading market could be at risk of another 10% downside.
If the S&P 500 is below 3,330, we need to be more cautious, but above that then this breakout is intact and we can continue to err on the long side.
Click on chart to enlarge view.
2. The second chart we want to look at is the deterioration in the number of new 21-day (1-month) highs among Nifty 500 components over the last few months. Additionally, we saw a slight increase in the number of 21-day lows over the last two weeks, so we want to keep an eye on these numbers to see if they continue to diverge from the action in the Nifty 500 and other major indices.
3. The last chart on our list is a US ETF that tracks the performance of Emerging Market Currencies. Last week we wrote a note for US Subscribers that we've made accessible so you can read why exactly this chart is important for Emerging Markets and Equities in general. How this consolidation resolves is very important and ties into the themes we've been discussing over the last few weeks.
In our view, these charts will help set the tone for this week and provide us information on how we should approach the market in the coming weeks.
Make sure to check out our other weekly post, "Trade Of The Week." Additionally, over the weekend we published an updated view on Reliance and some perspective on the breakout in TCS.
And if you haven't registered for this Tuesday's Conference Call, be sure to do so. We'll be discussing good data points, bad data points, and making sense of them all to figure out how to profit in the current environment.
Thanks for reading and please let us know if you have any questions.
Allstarcharts Team