The “Technical Evidence” For A Bigger Correction
The number of markets that are currently trading at technical targets/resistance is staggering. Usually these targets act as resistance and suggest a bigger correction. I expect stocks to sell off and a little more volatility in the coming weeks.
$Nikkei was one of the first markets to show a reaction after bumping up against resistance.
Next up is the German $DAX, which crumbles rather slowly but has already given back over 400 points from its all-time high. Price action in the $DAX looks very healthy though. Looking with my bullish lense, there is a chance that the $DAX is simply retesting the breakout point from the large channel (solid blue lines).
Moving on to our US American friends. US stocks have gone almost vertical for such a long time that most traders forgot corrections and sell-offs even exist or are too young to have experienced one. $DJIA has been one of the strongest markets and has overshot a couple of major technical levels before this trendline on the weekly chart. $Nasdaq has been the stallion in the stable but it too is trading at a level at which bears commonly come out of hiding. The $S&P500 shows a perfectly clean long-term channel completion. Similarly the $Russel2000 small cap index has completed a long-term channel.