Global Bull Market Still in Play, Supreme Test at Hand Now

08/27/2015 7:00 am EST

Focus: STOCKS

From a global perspective, Chris Kimble, of Kimble Charting Solutions, sees this bull market as being at a critical price point right now and suggests that if one of the key markets that he highlights breaks support, the others could well do the same.

The majority of the worlds stocks markets have been in an uptrend the past few years. The global stock market sell-off now has the majority of these stock markets testing bull market support channels right now.

chart
Click to Enlarge

As you can see from the six-pack above, stock markets from the US to Asia and Europe are all in rising channel bull market trends over the past few years. The declines this month now have each of these key markets testing the bottom of these rising channels.

Even though many say a correction or bear market in taking place right now, from a Power of the Pattern perspective, each bull market trend is still in play and being put to a very big test right now.

Risk is very high at this time in my humble opinion. I say this from a correlation perspective. What do I mean by that?

As you can see, the majority of these patterns look the same. Diversification of assets, spreading money around in stock markets in different parts of the world, isn’t reducing risk much, as they are all acting the same.

The risk here on a global basis is this, we live in a highly correlated world and if one of these markets break support, they all could. If one breaks support and ends its multi-year uptrends, the others could follow.

Over the past few years has it paid to be a buyer or seller when these markets are on support? I think you know the answer to that question. Will it be different this time.?

The global rising uptrend is still in play at this time and being put to a critical test. Support is support until broken, friends.

I am surprised of this…the decline from a 30,000 foot view has not been very big (support still in play), yet from a sentiment perspective we are seeing indicators reach levels that took place after the S&P 500 declined 50% in 2003 and 2009.  Does it seem strange to you that sentiment levels are as high now as they were in 2003 and 2009 and the market is only off around 10%?

Keep this global perspective in mind, if one of these key markets breaks support, the others could well do the same. It would appear from a Power of the Pattern perspective, the bull market is at a critical price point right now.

By Chris Kimble, Founder, Kimble Charting Solutions

Related Articles on STOCKS