A key global equity index is testing its significant breakout level from last month.
Just a quick post today featuring one of our new favorite indexes, the Global Dow Index. Again, the Global Dow is an equal-weighted average of 150 of the world’s largest stocks. It isn’t our favorite because it is necesarilly the most attractive looking investment at this time. Rather, we have found it very instructive as to the trend of global equities and, as a bonus, very receptive to traditional technical and charting methods.
For example, on April 15, we noted that the Global Dow was breaking out above multiple levels of key resistance. We had previously stated that its reaction at that level may loom large in determining whether the global stock rally is halted or extended. Thus, the breakout was a big victory for the bulls and, indeed, the index would pop another 5% or so immediately.
Presently, however, the index has come back down to test that breakout level. Nobody who has observed the equity markets the past 2 years should be remotely surprised about this as stocks have essentially been spinning their wheels over that time.
Big Picture:
Close Up:
As for the present test, the story is the same. A hold here around 2300 keeps the ball in the bulls hands. A breakdown below there gives it to the bears. Stay tuned to the developments in this key index.
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