World Market Headwinds Escalate On A Shift Away From Harmonic Globalism -

World Market Headwinds Escalate On A Shift Away From Harmonic Globalism

Nov 10, 2018Jeremy ParkinsonFinance0

In my Market Forecast for 2018, I thought that, taking into consideration the uncertainty of the 2018 U.S. midterm elections, coupled with likely interest rate hikes, we’d probably see:

volatility rise in 2018 and the SPX and other U.S. Major Indices gain only about half of what they gained in 2017, which would mean an approximate increase of 10% for the SPX

that Technology would remain fairly strong, while Small-Caps would likely struggle more than Big-Caps

that U.S. markets would continue to outperform other World markets (with the performance of their financials playing an important part)

WHAT HAS HAPPENED, TO DATE, IN 2018

At its all-time high set on September 21 of this year, the SPX had gained 9.62% year-to-date, as shown on the first percentage graph.

Since then, we’ve seen profits decline to a point whereby only 4.02% of those gains remain as of today’s (Friday’s) close, as shown on the second year-to-date graph.

You can see from the following daily SPX:VIX ratio chart that volatility increased greatly (doubled) this year, compared with 2017.

Watch for a bearish Death Cross moving average crossover form in the coming days. If that holds, as well as a drop and hold below 150, we’ll see further selling occur in the SPX.

The following monthly charts of the S&P 500, Germany’s DAX, France’s CAC, Italy’s FTSE MIB, India’s Nifty 50, China’s Shanghai, Australia’s S&P/ASX, and the Nasdaq Composite Indices show that the Momentum indicator (MOM) has been in decline all year…MOM is below the zero level on all of them, hinting at further weakness ahead on this longer term timeframe, especially if we don’t see strong, sustained, convincing buying come in soon.