World Met Resistance

By Jay KaeppelETFsFeb 12, 2018 10:51AM ET

www.investing.com/analysis/world-met-resistance-200289534

World Met Resistance

By Jay Kaeppel | Feb 12, 2018 10:51AM ET

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In this article titled “World, Meet Resistance” – dated 12/21/2017 – I noted the fact that many single country ETFs and regional indexes were closing in on a serious level of potential resistance. I also laid out three potential scenarios. So what happened? A fourth scenario not among the three I wrote about (Which really angers me. But never mind about that right now).

As we will see in a moment what happened was:

*(Pretty much) Everything broke out above significant resistance

*Everything then reversed back below significant resistance.

World Markets In Motion

Figure 1 displays the index I follow, which includes 33 single-country ETFs. As you can see, in January it broke out sharply above multi-year resistance. Just when it looked like the index was going to challenge the all-time high the markets reversed and then plunged back below the recently pierced resistance level.

World Index Single Country ETF

Figure 1 – Jay’s World Index broke out in January, fell back below resistance in February (Courtesy AIQ TradingExpert)

The same scenario holds true for the four regional indexes I follow – The Americas, Europe, Asia/Pacific and the Middle East – as seen in Figure 2.

Regional Indexes

Figure 2 – Jay’s Regional Index all broke above resistance, then failed (Courtesy AIQ TradingExpert)

So where to from here? Well I could lay out a list of potential scenarios. Of course if history is a guide what will follow will be a scenario I did not include (Which really pisses me off. But never mind about that right now).

So I will simply make a subjective observation based on many years of observation. The world markets may turn the tide again and propel themselves back to the upside. But historically, when a stock, commodity or index tries to pierce a significant resistance level and then fails to follow through, it typically takes some time to rebuild a base before another retest of that resistance level unfolds.

Here’s hoping I’m wrong

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World Met Resistance

World Markets In Motion

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