• 2020-12-28

Global Equity Markets

The S&P cumulative A/D line is rolling over – the type of rollover experienced in the 4th quarter of 2018 is still not visible. Most Global Equity Markets are in strong down-trends or completed significant top patterns this past week.

S&P 500 (CME)
The daily chart has completed a H&S top pattern with a target of 2632.

NY Composite Index
NYA has completed a H&S top. Note that my charting style ignores the early Mar decline. I make no attempt to include this price action as part of the H&S top. I always prefer a horizontal neckline to a slanted neckline.

The decline on through the neckline of an H&S top on the daily graph, thus providing a sell signal. Factor is short. All major U.S equity indexes as well as many global indexes displayed clearly defined bearish chart patterns – as a result I extended my sizing on this trade relative to many recent trades, still remaining well under 100 BPs for a risk level. I already began squeezing out risk by the close on Friday by advancing stop protection.

Nikkei Dow (CME)
Perhaps the cleanest H&S breakdown belongs to the Nikkei Dow. The CME contract is shown, although I typically trade the Nikkei at the Osaka Stock Exchange.