World Markets Update: 5 Up, 3 Down
Doug Short | Aug 18, 2013 02:07AM ET
The past week was another mixed bag for my eight focus indexes but with a somewhat more positive skew compared to the week before. Five of the eight posted gains. The Hang Seng was the top performer with a 3.36% rally followed by France's CAC 40, up 1.16% and at its 2013 high. The Three losers dropped over one percent with the worst performance being the S&P 500's 2.10% selloff, its second consecutive weekly decline.
The Shanghai remains the only index on the watch list in bear territory -- the traditional designation for a 20% decline from an interim high. See the table inset (lower right) in the chart below. The index is still down over 40% from its interim high of August 2009. At the other end, France's CAC 40 is down a mere 0.80% from an interim high following its 2009 global crisis trough.
Here is a closer look at the YTD performances, which continue to be dominated by the astonishing volatility of the Nikkei.
Consider this mind-boggling fact about the Nikkei in 2013: There have been 34 Friday closes so far this year. For 20 of those 33 closes, the Nikkei has been either the top performer (13 times) or the bottom performer (7 times). Nine of those weekly performances have been a gain (or loss) of over 4%. If we lower the threshold to +/-3%, the number rises to 13!
For the past several weeks I've included a snapshot of the Nikkei with its Fibonacci retracement highlighted. The behavior of the index against this metric remains fascinating. Below is an update through Friday, where we see the lower Fib at 38.2% as the approximate resistance of the latter part of the past week, not unlike the week before. Clearly this Fibonacci "jungle gym" continues to be a feature of the DAXK a price-only index, instead of the more familiar DAX index (which includes dividends), for constency with the other indexes, which do not include dividends.
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