Liquidity Factor Investing

Green Shoots In Global Equities

One of my favorite analytical techniques for generating insights on global markets is studying market breadth, and those who know me know I like to take a bit of an alternative angle, and today’s chart is no exception.

Q4 hedge fund letters, conference, scoops etc

Global Equities

rawpixel / Pixabay

What makes today’s chart so interesting is that (in contrast to most of the stuff out there right now) it presents a bullish take on global equities.  With investor sentiment still mostly on the bearish side, particularly on the fundamentals outlook, anything with a bullish slant should be greeted with particular interest.

The chart shows the count of 52-week new highs for the main equity benchmark across the 70 countries we monitor.  If you look closely you can see a slight tick up.

Global Equities

The chart comes from a recent report I wrote on the outlook for global equities.  As you might imagine I’m in the optimist’s camp.

Focusing-in on the chart, it’s a very familiar pattern we’re seeing here in this market breadth indicator.  I’ll give you a hint, the last few times we saw something like what we’re seeing now was in 2009, 2011, and 2016.

The complete disappearance and gradual reappearance of 52-week new highs has served as a reasonably reliable signal of a major market bottom.  So the punchline is this tick-up in the indicator may very well amount to “green shoots” for the outlook here as global equities teeter between bear market and bull market.

Though it’s early days in what is a relatively choppy indicator, it is certainly something to keep front of mind as we progress through this complex stage of the market cycle.

This article originally appeared as a submission at See It Market

Article by Top Down Charts

Saved Articles

Are you a smart investor? Join tens of thousands of sophisticated investor reading our authoritative free newsletter

* indicates required

Opt out of occasional 3rd party offers

Congrats! Are you a smart person? We have a limited time offer for sophisticated and loyal readers like yourself.

Sign up today and get three months free

Use coupon code VIP19 or click on the button below

Limited time offer only expires 8/31/2019 or next 30 13 subscribers whichever comes first – please do not share this discount with others