Technically Speaking: The World Diverges from The US
The comments below are an edited and abridged synopsis of an article by Lance Roberts
The markets were nervous as President Trump ramped up the rhetoric on China, instituting another $200 billion in tariffs and threatening $200 billion more if China retaliates.
With a double top in place, there is a rising level of overhead resistance that will have to be dealt with to move markets higher. The market will have to consolidate the recent advance above current support, a break of which will likely lead to a test of critical support around 2,800.
While the trend of US markets remains bullish, the rest of the world isn’t.
Around the globe (the UK, Germany, Japan, China, South Korea), sell signals abound. But it is not just these countries that have all signaled a change in their current trend; it is in the combined emerging market and industrialized international countries globally.
While bullish sentiment controls the short-term trend and direction of the market, the longer-term dynamics are getting cloudier, and the international slowdown is becoming increasingly obvious.
The era of growth fueled by macroeconomic stimulus is drawing to an end. Absent deep-rooted reforms to improve productivity, growth spurts in emerging and major international markets are over.
