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True to form, the U.S. equities markets are now well into the process of testing resistance at the 200 day exponential moving averages. Typically, in the context of a bear market, the 200 day moving averages can act as trading resistance, setting the stage for sharp moves downward.

To be sure, this may not be a bear market, and the 50 and 200 day moving averages may not present any sort of lasting resistance. And more to the point, markets can and do overshoot their moving averages - on the downside as well as the upside. Simply closing above a trading resistance area is not the only test for whether an equities market is technically posturing itself as a bear market.

The main risk, technically speaking, remains that for many of the broadest equities indexes that include or are comprised of international equities (such as the Dow Jones World Stock Index), the short term moving averages have dropped to or below the long term moving averages. We see comparable technical postures across many broad based international etfs - EEM, EFA, GWL, VT, for example - where the 50 day exponential moving average is at or below the 200 day exponential moving average. To technically-minded traders, that is a sell signal. The last time these indexes and ETFs hit technical conditions equivalent to those we face today, some traders made a lot of money shorting the market. Traders are prone to placing trades what worked well the last time... until those trades start to lose a lot of money. And with the U.S. markets now in the area of their 200 day moving averages, the time for bears to strike will come soon.

In a nutshell, the global equities markets are at a major inflection point, poised at or around levels that will attract selling pressure. How the markets stand up to that pressure over the next weeks will likely confirm whether we are at the front end of a bear market, or whether the past months simply amount to a well overdue consolidation phase in the equities markets worldwide. The good news is that for better or worse, the technical conditions of the equities markets will be somewhat clearer within the near term.

Disclosure: Author holds no positions in any securities mentioned herein.