Dow Jones World Stock Index Downtrend Correction

As discussed here and here, The Dow Jones World Index moved lower retracing most of the rise from May 2010 to May 2011, as noticed in the weekly chart above. 

The downtrend had an impulsive 5-wave structure (see the daily chart below) which may have ended in the beginning of October setting up an a-b-c correction which can run until perhaps end of November or early December. When this rebound is over, the longer term downtrend could resume. 

Markets Price to Moving Average Snapshot

Most global stock market indices enter medium term green setting up an intermediate term rebound in a still bearish long term trend.

Markets Price to Moving Average Snapshot

Generalized short term rebounds with most indexes below medium and long term moving averages.

Silver's Moving

Silver has started moving within a rising channel since July, after a two-month correction.

The 61.8% Fib retracement of the May - July correction (around 43) is now challenged and if broken opens the way for a test of the May highs (around 50) and perhaps for new highs later on.

US Philly FED Survey in Recession Area

..two months after the US Philly FED Survey Slowdown Warning.

CRB Index Touching Support

As discussed in a previous post in the beginning of May, the commodity CRB Index started a correction following three failed tests at the 61.8% Fibonacci retracement of the 2008 - 2009 plunge. The target of the correction was the 320 area which has been met recently as can be noticed in the updated daily chart above. The index strongly bounced from the 320 area right on the monthly cycle.

The updated weekly chart below shows that 300 - 320 could prove strong support due to the monthly rising uptrend line (now just above 300) connecting the 2009 and 2010 lows. Any break below 300 could send the index to 250 or even lower, while holding above 300 and turning higher could set the stage for a new test of the April - May 370 area. Trading wise, aggressive traders could go long due to the good risk/reward at this point. However, we should be aware that both daily and weekly charts are still in downtrends.

30-year Low in US University of Michigan Consumer Confidence

..a reaction to the last two weeks markets volatility that may send US GDP growth in recession area.

US Treasury Bond Yields Leading World Equity Markets Lower

As noted here, here and here, the US 10-year treasury bond yield trends are leading the trends in other asset classes. Last week we had a good example of how US bonds are "leading" the equity markets around the world.

The 2.90 US 10-year Treasury bond yield support level, well discussed in the mentioned posts, eventually gave way and started the plunge on Friday July 29th, as noticed in the updated chart below:

On Monday August 1st, German DAX dropped through key support (6-month uptrend line and 200 SMA), see chart below:

Tuesday August 2nd was the day when key support levels were broken in many equity markets including the US S&P500 Index (levels discussed here, see updated chart below),

the Romanian BETXT Index (levels discussed here, see updated chart below),

and the Dow Jones World Stock Index (levels discussed here, see updated chart below).

US Macro Downturn Charts

Markets Price to Moving Average Snapshot

The summer rally ended in a red sea.

EURRON Range-Trading Time

The EURRON reversal anticipated in a previous post happened as discussed, reaching each of the mentioned targets (4.15 and 4.19 - see the updated chart above) and then breaking higher in an impulsive move that took the rate to the 61.8% Fib retracement area around 4.23 and spiking towards the rarefied area bordered by 78.6% retracement around 4.2750.

The 4.23 - 4.275 area is a strong resistance that could propel the rate back to 4.33 if breached. A break below 4.19 area could send the rate back to 4.15 and towards this year lows around 4.06. The 4.19 - 4.23 in-between area is no man's land and a potential boring range. However, as long as EURRON stays below 4.23, the odds tilt towards resumption of downtrend by breaking below 4.19 later on.

US Monthly Change in Nonfarm Payrolls Approaches Zero

US 10-year Treasury Yield Halts on Target

This post title is the answer to a preceding post discussing the importance of the 2.90 level (see updated weekly and daily charts above and below).

The US 10-year treasury note yield halted on targeted mentioned level in June and reversed signaling the potential start of the summer rally in equities, commodities and the continuation of the dollar weakness.

Potential target for reversal is the weekly falling 200SMA and the downtrend line in the 3.40 - 3.50 area.

Markets Price to Moving Average Snapshot

Compare this table with the last week one. Notice the change in color on all three time frames and the switch of all US treasury notes yields from red to green signaling the potential start of the summer rally.

US Consumer Confidence Lower