Techtalk US equity - Dow rebound ended, get ready for the next down leg!
Techtalk US equity - Dow rebound ended, get ready for the next down leg!
US DJIA’s rebound since mid-Jul has likely ended after the Index broke down below its bearish rising wedge last night. The MSCI World Equity Index breakdown of the triangle consolidation since mid-Jul further reaffirms our view of a further downside for global equity markets in the coming weeks. MSCI Asia ex-Japan Index (MAxJ) broke down the 450 major support trend line this week, likely sign of more downside for regional equity markets in the coming weeks. Furthermore, we are of the view that crude oil price could be due for at least a rebound soon. A sharp rally in crude oil prices could hurt the already fragile sentiment in global and regional equity markets If we are right, the destructive wave C (iii) has just kicked in. Dow could reach our 9,750pt Head & Shoulder target in the coming months. Likely confirmation of the destructive wave C(iii) if most global equity markets crack below their mid-July lows. Failure to break below the Jul lows could indicate the mid-Jul rebound has yet to end.