Tuesday, January 1, 2008

Support for Global Equities Poised to Break

a most ominous neckline has formed over the last five years on this chart of the Dow Jones World Index relative the price of gold:

priced in national paper monies the $DJW is also moving into a bear phase (defined as the 13 week exponential moving average ['wema'] crossing below the 55 wema). against the Euro the bear was confirmed in November:

in terms of Swiss Francs it looks like the averages just crossed in the last week:

while the index hasn't yet seen a bearish confirmation against the Nippy, a breakdown in this ratio looks especially probable, considering the blatant neckline that has formed at the 3.2 level over the last year. take a look:

and of course since the orginal basis of the index, the Dollar, has been the weakest currency of late here the bearish confirmation appears the furthest away, although a decline below 290 would put serious questions marks around the health of the global finanical system. (of course the question marks are already there, but perhaps many more people and computer programs will notice them...)