Equity markets preparing for the next wave of selling.
There are a few signs that equity markets could be on the verge of a fresh move to the downside. Here are a few charts to explain.
1. Equity/Bond Ratio
The ratio between equities bonds has rallied into a significant resistance zone and is showing signs of rolling over, this suggests the bullish momentum has stalled and we could be about to see a shift out of riskier assets (equities) and into safer havens (bonds).
There has been a notable pick up in the VIX index in recent session, which highlights an increase in volatility. The breakout from the corrective wedge could suggest we are about to see a further increase in volatility.
Read on....
Investamate
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3. Put/Call Ratio
There has been a small uptick on the Put/Call ratios in recent sessions, suggesting more downside protection is being purchased.
Read on....
Investamate
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4. S&P
Head and shoulders patterns everywhere! On the 4H charts I can make out 2 head and shoulders patterns, both are bearish reversal signals and suggest lower prices maybe seen. There is a nice confluence of targets from these patterns around 2640, so this is what I will be looking to target.
Good luck!
End.
Investamate
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@Investamate, The equity basket Stoxx600, S&P500 & FTSE100 overshot to the upside. It now looks like it may form a bearish engulfing/outside candle on the weekly chart.
The ratio between stocks and bonds has hit a clear resistance and looks ready to resume lower (Favouring owning bonds over stocks)
There has been a notable pick up in the VIX index in recent session, which highlights an increase in volatility. The breakout from the corrective wedge could suggest we are about to see a further increase in volatility.
Read on....