Equity Bull Markets Toeing The (Trend-)Line

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by Dana Lyons

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A slew of global equity markets are testing key bull market Up trendlines.

After a few slow weeks, our #TrendlineWednesday feature on Twitter today was more prolific. Much of that can be attributed to a wide array of equity indices testing key bull market uptrends. Specifically, several are testing their cyclical bull market Up trendlines – primarily from early-2016 lows (although, some of us would argue that the cyclical bull actually still stems back to 2009). In any event, these ~2-year old trendlines hold considerable significance. They have provided the necessary support to maintain the bull markets’ pace of advance thus far. Therefore, a break of such support would undermine the pace of advance, at a minimum – and potentially subject the markets to meaningful downside pressure.

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As mentioned, several of these trendlines are under siege currently from a number of equity indices, both domestically and abroad. Leading off, due to visibility, is the Dow Jones Industrial Average which is testing the Up trendline from its early 2016 lows.

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Similarly, the broader NYSE Composite is also testing its post-2016 Up trendline.

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As we mentioned above, it’s not just U.S. indices experiencing tests of their bull market uptrends. In Hong Kong, the Hang Seng is also testing the Up trendline from its 2016 lows.

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And around the world in Chile, we see it’s benchmark stock index, the IPSA likewise testing its post-2016 Up trendline.

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Finally, another emerging market, Taiwan, is testing its Up trendline stemming back to its cyclical low in 2015.

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So what will become of all these key trendline tests? Time will tell. There are markets that we like a great deal — and others that we don’t. But the fact that we have an abundance of tests underway simultaneously suggests that we’re at another important juncture in the global market — so stay on your toes.

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