Global Equity Markets, Risk Assets Close to Major Peaks

From the last update:

“In the next few days, look out for a slowdown in momentum on shorter-term charts and divergences on medium-term ones.”

This has come to pass – momentum slowed down through over a week of sideways, lateral action and began to diverge on four hourly charts. Signs of a major top are continuing to accumulate.

 

Here on a four hourly chart of the EuroSTOXX 50 the lateral consolidation took place just above the initial target for the whole correction at 2400. I expect the index to top within about 2% of current levels. It could go higher, but that is entirely unnecessary. Sustained trading below 2401 (RED line) increases confidence in a “top-in” view.

 

Going out further, in the longer-term, I expect global equities to fall far and for a long time, as shown here on a daily chart of the Dow Jones Industrial Average.