London closer to breakout, than breakdown- Really???

really pic

While the media is focused on the noise around Brexit, yesterday the Power of the Pattern shared that Germany (DAX) and London (FTSE) remained above 6-year rising support. See post HERE.

Below takes a closer look at the FTSE index in London, the so called center of the news noise.

london near resistance test june 28


As mentioned above, the FTSE Index (London) has been in a down trend the past year (lower highs and lower lows). Over the past 6-years, it remains in an uptrend, so far higher lower and higher highs.

The news last week did NOT cause the FTSE to break rising channel (A) support.

At the time, the FTSE is near falling resistance at (1). Despite all negative attention on Europe last week, the FTSE is closer to a breakout than a breakdown at (1) above.

If Europe is really in trouble from a stock market perspective, rising support channel (A) needs to break and so far it has not.


Global Leading Indicators, testing 6-year rising support channels

follow the leader goldfish

Long before last weeks Brexit vote, Germany’s DAX index has been an upside and downside global stock market leader, over the past few years. Below looks at the pattern the DAX has created over the past decade.

dax testing 6 year rising support june 27


Since mid 2009 the DAX has remained inside of rising channel (A). The top of this channel was hit in April of 2015. Since hitting rising channel resistance, the DAX has started creating a series of lower highs inside of falling channel (B). So far the idea of “Sell In May” last year, has been a good strategy, in this key index.

Channel (A) is created by weekly closing prices. Last week the DAX closed just above rising channel (A) support. If the DAX breaks below rising support (A), this leader, would be breaking a trend that has been in place for years.

Below looks at the NDX 100 index over the same time period as the DAX above and how much patterns look the same. Remember this, the NDX 100 has been an upside leader (Stronger than the S&P since 2003) and it is testing 6-year support as the DAX is doing the same.

nasd testing 6 year rising support june 27


Similar to the DAX, the Nasdaq 100 index, remains inside of a 6-year rising channel too. Over the past year, the NDX 100 might have created a topping pattern (Head & Shoulders) pattern. The index closed right on rising support at (1) last week.

If support would give way, the next key test would be the neckline around the 4,000 level at (2).

Bottom line– Two leading indices (DAX & NDX 100) are both testing long-term rising support channels this week. The trend of higher lows and higher highs is being put to an important test this week.

If “Leadership” breaks 6-year rising support, it would be a very important trend break for the long-term Risk On trade.

Full Disclosure- Premium Members are short the NDX 100 with a tight stop in play.



2007 pattern being repeated right now? Another “Push Away???”

NYSE repeating 2007 pattern potential push away june 24


The NYSE index kissed the underside of dual resistance at (1) back in 2008. Once resistance held, a big push away from it took place and sellers stepped forward.

NYSE creating a similar pattern again at (2)???

This would NOT be a good place for the Risk On trade if the broad market starts “pushing away” from dual resistance at (2).

Full Disclosure- Premium Members are double short the Nasdaq 100