Global Equity Breadth Check
Callum Thomas | Oct 09, 2017 12:06AM ET
In this article we look at a 3 key charts on global equities that utilize market breadth techniques. In this case we are looking at the breadth across country benchmarks i.e. the main stock market benchmark of all countries where decent pricing data was available (70 countries in this case). I talked about how we use breadth indicators to generate insights on the key trends in global equities in the article economic cycle indicators ), and also with reference to your ability to act on the alarm and the consequences of a correct alarm. Something to think about! Would love to hear your thoughts on the matter - either get in touch or post in the comments below...
We're seeing ongoing divergence in Global Equities country breadth on a 50-day moving average basis (i.e. higher highs in the iShares MSCI ACWI (NASDAQ:ACWI) vs progressively lower highs in the breadth indicator).
"Golden Cross Breadth" (i.e. proportion of countries with their 50dma above the 200dma) is rolling over, this can be an early warning sign.
Taking the flip-side of the previous chart, this one shows the number of countries undergoing a "death cross" - the opposite of a golden cross, where the 50 day moving average falls below the 200 day. It's basically the same signal, but perhaps looks a little bit more interesting when presented this way...
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