The percentage of world markets above their 50-day moving average has surged to 86%. But how strong are these trends?
Here’s the chart:
Let's break down what the chart shows:
The black line shows the percentage of world markets above their 50-day average.
The red line shows the percentage of world markets that have a 50-day average greater than their 200-day average.
The Takeaway: The key development here is that global breadth is improving, which is typically supportive of US stocks. Currently, the percentage of world markets above their 50-day moving average has reached its highest level since September of last year. This recent increase in global breadth readings suggests that the underlying short-term strength in the market is healthy, potentially presenting short-term opportunities.
While this is a promising starting point for world markets, the overall trend strength of most world markets remains weak. To clarify how I identify a strong uptrend: is when the 50-day moving average is above the 200-day moving average. Currently, only 23% of world markets have their 50-day moving average above their 200-day moving average. This indicates that the bulls still have work to do in order to solidify this recent move and ensure that this short-term strength has lasting power.
Grant Hawkridge | Chief Aussie Operator, All Star Charts
PS. JC hosted his latest conference call on Monday. It was full of charts and trade ideas. Don’t miss it.
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