Global Markets Teeter Precariously on the Edge

06/19/11 BullBear Market Report

Read the prior blog entry before assimilating the information in this new report.

So far the core analysis presented in the last BBMR has been validated by market action, technicals and ongoing developments in the fundamentals.

As suggested, markets around the world have tested or violated key technical levels. In this video, I follow up the prior video report with further evidence of an ongoing, global technical breakdown across virtually all world markets.

Here's a direct link to the video: https://www.youtube.com/watch?v=lnGFTFVv-Lg

Nasdaq 100 has closed below its 200 EMA for three consecutive days and is challenging its long term uptrend:

It appears that Crude Oil and quite probably the commodities complex in general is leading the next break lower in a repeat of the May top. The geosynchronous technical weakness is not likely to be an anomaly or a false signal and is already in a sufficiently advanced stage of development that a reversal and re-initiation of the bull market are unlikely.

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Comment by Steven Vincent on June 22, 2011 at 6:38pm

UPDATE:

Looking around at the world markets and various asset classes, I continue to see a very dangerous setup unfolding. Grains broke major support today and many, many markets continue to teeter weakly just above hugely significant long term support. Failures could start to happen at any time and begin to cascade, but virtually no one seems to see it. The situation really is that dangerous, made all the more so by a generalized complacency.

We have started to see the breaks: Grains, Apple, China, India, Crude Oil. With regards to the recent bounce, it has largely been confined to a few markets, mostly US, and many many markets have barely participated. The rally has also been on weak volume and questionable technical quality.

Unemployment Claims in the morning could be the catalyst to tip things over the edge. But while the high for this correction could already be in, strictly speaking there should be one more high to the 1300-1305. The top could be in already, with the recent rally another "one day wonder" that fails immediately. A review of the technical charts doesn't really tell us whether the corrective rally is over, but it certainly is possible. The wave structure is arguably right. Here's the 4 hour bar chart:

Here's the daily chart:

Price glanced off the lower end of resistance zone and 20 EMA and reversed sharply. Target is a Fibonacci cluster in the vicinity of the November and April 2010 highs.