A key barometer of the global equity rally is facing an important test.
One of the interesting trendlines in this week’s edition of our regular #TrendlineWednesday feature on Twitter comes from the chart of the MSCI EAFE Index (EAFE). As a reminder, the EAFE Index represents developed countries in Europe, Australasia and the Far East. Like most equity markets around the globe, the EAFE has enjoyed a strong up-move of late, particularly over the past 2 years. The index did hit a snag, though, along with most stocks, early this year in the form of a post-January correction. And the resulting action has the EAFE testing an important line of bull market support.
Specifically, the EAFE is testing the Up trendline stemming from its Brexit lows and connecting the post-U.S. election lows and the lows from this past March-April.
As the chart indicates, the “test” level – near 2023 – also happens to signify the approximate convergence level of both the 50 and 200-Day Simple Moving Averages.
Obviously, if the EAFE wants to maintain the direction and pace of its current advance, it would behoove the index to hold this key cluster of support.
So keep an eye on the approximate 2023 level on the EAFE for a “tell” on the future direction of the global developed market equity rally.
* * *
If you’re interested in the “all-access” version of our charts and research, please check out our new site, The Lyons Share. You can follow our investment process and posture every day — including insights into what we’re looking to buy and sell and when.
Don Kaufman delivers what readers are calling 'HIS BEST YET!' In this exclusive Guide, Don will give you ALL the secrets he's taught millions of other traders to help guide them along in their successful options trading journey...
Now, this is NOT for those who only want to make a HALF attempt...nope...this is ONLY for those serious about becoming a better trained, more profitable, and long term options trader!
If that's YOU...Download Your Copy below: