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A Walk Through World Stock Markets at Trader’s Narrative




A Walk Through World Stock Markets


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Man does not live by bread alone.
Stan Weinstein book cover look inside
And neither is the US stock market the only market out there.

But we usually tend to act as if it was the only one that counts. One of the many lessons I learned from Weinstein’s excellent book: Secrets for Profiting in Bull and Bear Markets, is to monitor global indexes. Cheesy title, but excellent book - if you don’t have it, get it today.

This takes on extra importance at important inflection points - which are difficult to spot in the moment, as you’ve no doubt noticed. While the US market is probably the most important in the world, due to the interconnectedness of our world, it can not decouple from the rest. So by comparing it to the others, we can gain insight into bull and bear markets.

So with that in mind, below is a (not so random) walk through the world’s major stock markets. First, let’s take a look at the European exchanges, then Toronto and the South American Indexes and finally, Asia.

Since looking at so many charts can be dizzying, I’ll keep tabs on a couple of specific technical criteria. For example, the slope of the moving averages as well as whether price is uptrending or downtrending (making a higher high and a lower high or vice versa).

FTSE index may 2009.png
FTSE (England)

  • made a new low in March 2009 (still downtrending)
  • yet to break above January 2009 highs
  • slope of 200 day moving average is down
  • 50 day moving average is below price & climbing

CAC40 Index May 2009
CAC 40 (France)

  • made a new low in March 2009 (still downtrending)
  • yet to break above January 2009 highs
  • slope of 200 day moving average is down
  • 50 day moving average is below price & climbing

DAX index May 2009
The DAX (Germany)

  • made a new low in March 2009 (still downtrending)
  • broke above January 2009 highs
  • slope of 200 day moving average is down
  • 50 day moving average is below price & climbing

amsterdam index May 2009
Amsterdam (Netherlands)

  • made a new low in March 2009 (still downtrending)
  • yet to break above January 2009 highs
  • slope of 200 day moving average is down
  • 50 day moving average is below price & climbing

IBEX 35 May 2009
IBEX 35 (Spain)

  • made a new low in March 2009 (still downtrending)
  • yet to break above January 2009 highs
  • slope of 200 day moving average is down
  • 50 day moving average is below price & climbing

MIBTEL index May 2009
MIBTEL (Italy)

  • made a new low in March 2009 (still downtrending)
  • reached January 2009 highs
  • slope of 200 day moving average is down
  • 50 day moving average is below price & climbing

TSX index May 2009
S&P/TSX (Canada)

  • made a new low in March 2009
  • well above January 2009 highs
  • slope of 200 day moving average is down
  • 50 day moving average is below price & climbing

mexico bolsa May 2009.png
Mexico Bolsa Index (Mexico)

  • made a new low in March 2009 (still downtrending)
  • well above January 2009 highs
  • slope of 200 day moving average is down
  • price is above long term average
  • 50 day moving average is below price & climbing

BOVESPA May 2009
BOVESPA (Brazil)

  • low was in October 2008 (in uptrend)
  • well above January 2009 highs
  • slope of 200 day moving average is flattening
  • 50 day moving average is below price & climbing

MERVAL Argentina index May 2009
MERVAL (Argentina)

  • low was in October 2008 (in uptrend)
  • well above January 2009 highs
  • slope of 200 day moving average is down
  • 50 day moving average is below price & climbing

Turkey Index May 2009
ISE 100 (Turkey)

  • low was in November 2008 (in uptrend)
  • well above January 2009 highs
  • slope of 200 day moving average is flattening
  • 50 day moving average is below price & climbing

Bombay Index May 2009
BSE 30 (India)

  • low was in March 2009 (in uptrend)
  • well above January 2009 highs
  • slope of 200 day moving average is flat & beginning to rise
  • 50 day moving average is below price & climbing
  • gapped up post election - gap not shown on chart

RTS Russian Index May 2009
RTS Index (Russia)

  • low was in January 2009
  • price is in steep uptrend (higher highs & higher lows)
  • and has broken above the long term average
  • slope of 200 day moving average is falling
  • 50 day moving average is below price & climbing

Shanghai Index May 2009
Shanghai Composite (China)

  • low was in November 2008
  • price is in steady uptrend (higher highs & higher lows)
  • slope of 200 day moving average is flat
  • 50 day moving average is below price & climbing

Hang Seng Index May 2009
Hang Seng (China)

  • low was in March 2009
  • price is in uptrend (higher highs & higher lows)
  • and above the long term average
  • slope of 200 day moving average is falling
  • 50 day moving average is below price & climbing

Nikkei Average May 2009
Nikkei Average (Japan)

  • low was in March 2009 (double bottom)
  • price is in uptrend (higher highs & higher lows)
  • but below the long term average
  • slope of 200 day moving average is flat
  • 50 day moving average is below price & climbing

KOSPI index May 2009
KOSPI (South Korea)

  • low was in November 2008
  • price is in uptrend (higher highs & higher lows) but below the long term average
  • slope of 200 day moving average is flattening
  • 50 day moving average is below price & climbing

SET Thai Index May 2009
SET Index (Thailand)

  • low was in October 2008 (double bottom)
  • price is in uptrend (higher highs & higher lows)
  • well above the January highs
  • slope of 200 day moving average is flattening
  • 50 day moving average is below price & climbing

Australia Index May 2009
All Ordinaries (Australia)

  • low was in March 2009
  • price is in uptrend (higher highs & higher lows)
  • above the January highs
  • slope of 200 day moving average is flattening
  • 50 day moving average is below price & climbing
  • price is squeezed between the two averages

Conclusions
This simple exercise demonstrates that although the general world stock markets move in unison, there are many different looking charts. While most indexes bottomed out in October or November of last year, many found a floor in March (like the US markets), while others like Russia somewhere in between.

Many different markets around the world are showing clear signs of a change in tone. The most important divergence with the US is that they didn’t fall to lower prices in March (for example, South Korea’s KOSPI or Argentina’s MERVAL).

Finally, it seems that the smaller capitalization exchanges and the commodity oriented economies are the ones that are showing a more robust recovery. Countries like Brazil, Thailand, India, etc.

Even if the US market (S&P 500 Index) doesn’t end up following these lesser markets higher, at least it is good to know that there is always a bull market somewhere.

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4 Responses to “A Walk Through World Stock Markets”  

  1. 1 Guru

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    I, too, just discussed this in a piece called “U.S. Stocks, the World’s Laggard” and compared our market with those around the world. Our market and those in other “developed countries” of Western Europe are falling far behind markets in Asia and South America, in their recovery from this Crash. But then again, the US market is less volatile. But it does diversify with some money in these other world markets through ETFs.

  2. 2 yo

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    excellent mode of analysis!

    i knew commodity plays were outperforming, but this shows how.

    be nice to see this once a quarter.

    thanks

  3. 3 Steve

    Deprecated: preg_replace(): The /e modifier is deprecated, use preg_replace_callback instead in /home/traders/public_html/wp-includes/functions-formatting.php on line 76

    Does anyone here use New Highs - New Lows, and Advances -Declines, when examining foreign market indexes? If so, can you point me to data source(s) for this information?

  4. 4 Djvu

    Deprecated: preg_replace(): The /e modifier is deprecated, use preg_replace_callback instead in /home/traders/public_html/wp-includes/functions-formatting.php on line 76

    Nice work!!!
    I was looking for latest data of world markets - % above their 200 DMA to measure the extent of overbought-ness and stumbled upon your site.
    Indian Markets are 37% above their 200 DMA.
    History shows such a huge spread means a fall of at least 15% over 1 or 2 months. See my blog for backtesting results.

    Can you do the same analysis of world markets as on today and post how much are their above their 200 DMAs? would be great!

    For eg. China went up to 55% above 200 DMA and now its just 7% above 200 DMA after falling 23%. till yday it was even below its 150 DMA.

    Cheers
    DJ-VU

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