In my very first post on the blog, I am gonna take you on a small journey around the world/assets. We are gonna look into a few charts and try to understand where we are “in history”. Does this bull run have more room to go or is it maybe coming to the end? Maybe the most anticipated recession which never came in 2022/23 will finally show up in 2024. To “understand” the big picture I show you a few charts. And I don’t mean some macro or economics charts. We look into charts of the most “important” countries around the world from a global economy/financial point of view. We look into: USA – SPX, Germany – DAX, France – CAC, Italy – FTMIB, UK – FTSE 100, Japan – NIKKEI 225 and China – HSI. On top of them, we will look into two “most important” assets in the financial world: dollar – DXY, probably the most important “thing” and US Bonds -TLT. To have a perspective about the dollar we have to look into other major currencies EUR, GBP, JPY, miners – GDX, SIL, and Cooper – HG1. In general, I leave macro, economy, geopolitics, politics, liquidity, earnings, etc. on the side this time and try to focus only on these charts. Just to have some perspective.

Let start :

1: SPX Longer view, MONTHLY chart from 1999/DOTCOM

Well-defined price channel. Some more details are in the DAILY chart below.

We reached a very important milestone and psychological level of 5000. We did this on a negative divergence on RSI(it means nothing alone, this divergence can go for a long time)  and is very disconnected from 200 DMA(can go “forever” also). We had a very strong 5 months without any pullback and weak/diverging market breadth. In this post, I don’t want to go into economics, geopolitics, earnings, or any other similar aspect. We look purely at charts for “imagination of the bigger picture”. Just want to point out that we MIGHT be at an inflection point on SPX and any other chart in this post.

2: DAX Longer view, WEEKLY chart from 2009/GFC

Again it is a well-defined price channel. As we all know Germany is in big trouble. Recession, energy issues, political issues, the housing market already breaking down, etc. Don’t want to go into details in this post. Just want to point out that we might have reached an inflection point.

3: CAC40 longer view, MONTHLY chart from 1992

Well-defined channel. Maybe France’s economy/problems are not as big as Germany’s but still far from prosperity/boom. Again we are approaching a moment when we could expect some reaction from price.

4: FTMIB longer view, MONTHLY chart from 1998

Again it is a well-defined channel, although this time down channel because Italy never recovered from its 2000s highs. And again we are not going into details about the state of the economy or index. Just showing the inflection point.

5: FTSE 100 Longer view, MONTHLY chart from 1995

Well-defined channel. I think the UK is in big trouble. The economy is already in recession. Without going into details let’s look at the chart.

6: NIKKEI 225 Longer view, MONTHLY chart from 1988

It is harder to draw a channel from the famous housing bust in 1989. But what is more important for us is that after 34 years Japan finally reached the top from 1989 !!! Potentially forming a double-top formation. Let’s not forget that Japan entered an official recession just a few days before reaching ATH !! And again I am not judging here if this is a top or not, just pointing out an inflection point. In this case, I would call it monumental 😉

7: HSI Longer view, MONTHLY chart from 1990

I am using the Hang Seng index as a proxy for China. Well-defined channel. This time we have a different situation where price action is not at the top of the channel. We all know that China is in massive trouble. Housing collapse, massive outflows, lack of foreign investment, trade recession, and so on. We are not going into details in this post. Again a very important moment for China. We could break down further or go back to the channel.

So we looked into “all” of the most important countries for the global economy. Whatever your bias is bullish or bearish you have to admit that we are at an inflection point. These channels are pretty well-defined. And just to be clear, this process of defining the next move can take days, weeks, or even months. So how we can look deeper into what can happen next without looking into the economy, politics, earnings, geopolitics, etc? Well, we can look into DOLLAR, the most important asset out there. We all know a strong Dollar = problems for the world. If the Dollar is heading up it would be really difficult for these previous charts to go up. Almost impossible. So let’s look into DXY to check if the Dollar is at an inflection point too.

8: DXY Longer view for perspective, MONTHY chart from 1977 and WEEKLY chart from 2008.

Is the Dollar at an inflection point? Looking at monthly or weekly charts is not. Let’s dive deeper into daily to check if anything is pointing to an imminent move up or down. And as long as we are above the thick red line is bearish for the world in my opinion. In a daily chart below I added some more moving averages(10,20,50day) to show how they are close together which might mean that the bigger move is close in either direction. From 25/05/2021 – 28/09/2022, we had a massive surge in the dollar. A surge that caused many problems around the world. As I said before, a strong dollar = problems. Now try to imagine if this fall in the dollar which started on 29/09/2022 – till now is only a retracement and we are going higher. What would that mean for the “other” charts and the world? There is only one answer – PAIN, lots of PAIN. 2023 looks like the Wyckoff accumulation/distribution phase to be honest. Fibonacci level at 0.618 from 2022 top ( I don’t like and never use fib levels but just pointing out cause I know many people do). Of course, we don’t know if the dollar is breaking out but we need to be open-minded. Let me show you the daily chart:

Let’s look quickly into major USD currency pairs EUR, GPB, and JPY and see if they are at an inflection point.

9: EUR/USD Longer view, WEEKLY from 2005.

Clear, well-defined channel. The Euro is losing its value against the dollar from the GFC and it is hard to see it coming back with strength due to its problems, energy issues, and weak economy. But hey you never know and we have to be open-minded. Some more info in the daily chart. Again I added more MA and they are tighter and tighter which might indicate bigger moves in the near future.

10: GBP/USD Daily chart

In this pair, I am not going to show you long-term trends because it is not as important. Just want to point out that the pound can be on the edge of bigger moves … either direction like everything else 😉

10: USD/JPY Longer view for perspective, MONTHLY chart from 1970

Yen is also at a crucial moment. 150/151 where in the past the Bank of Japan was intervening. Are they able to hold the line again?

11: HG1! WEEKLY chart from 2008/GFC

Dr. Cooper 🙂 without going into details about the state of the world economy, mining, and global demand we might be at an inflection point 😉

12: GDX, SIL DAILY charts

Gold and silver miners. I will put them here together because their price movement is very similar. Similar price action to Cooper. I am not a huge fan of those triangles but sometimes this type of price action leads to expansion.

13: TLT Longer view, MONTHLY chart from 2002

And the last chart of this long and boring post. Last but very important. As we all know we had declining interest rates for the past 40 years and a massive bull market in US Bonds. Again I don’t want to go into details about growth perspective, inflation, supply, or why and where bonds are heading from here. Just want to show some institutional positioning in TLT(and yes I know that TLT is a mini part of US Treasuries but it’s a good indicator of sentiment). Yellow lines on the daily chart indicate institutional trades. A number above means how big was that trade compared to history( I have access to data from 2009). In the last 2 months, we have had the 5 biggest trades in the history of TLT( from 2009) all more than a billion $ each. Institutions are either accumulating or distributing shares. Time will tell. Again a very important moment for price action.

So that’s it, all 13 charts. I hope that you found them interesting and that after reading this post you will have a small brainstorm in your head. Whether you are bullish or bearish you have to admit that we are in a very interesting moment for price action. And I fully understand that you can draw these channels differently and have a bit of a different picture. You have to remember that the price can ALWAYS go outside the channel. As I said before it can still take a few weeks or even months before we see any big move if we see any. These are only drawings and don’t matter alone. That’s why it is so important to read, listen, learn, and study markets every day. Macro, economy, company earnings, options, institutional positioning, geopolitics, sentiment – all matters. But even then stock markets are doing what markets do best – confusing ;). I hope I will find the correct road to my first million.

My next post in a few days will be about actual trade. I will focus mainly on posting actual trades rather than my long thoughts about the market and economy. If you have any questions – just ask 😉