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Why Global Investors Should Pay Attention to “Non-Confirmations”

“Markets almost always splinter when big changes in social mood are afoot”

by Bob Stokes
Updated: March 23, 2020

When a trend is strong, related markets tend to move in unison.

However, when a trend is near exhaustion -- bullish or bearish trend, this applies to both conditions -- "non-confirmations" often occur. A non-confirmation occurs when one market makes a new high (or low), but a related market does not.

As cases in point, our November Global Market Perspective discussed the details of the non-confirmations in Europe as it showed two charts. Here's the first:

The Euro Stoxx 50, the DAX and the FTSE 100 (top three graphs) have so far failed to confirm new multi-year highs in the CAC 40 and the Swiss Market Index (bottom two graphs).

Here's the second chart with continued commentary:

The chart depicts [a] critical loss of juice in Britain's higher-beta indexes. Notice that while the FTSE 100 is off 6% since its May 2018 high, the Small-Cap index and the AIM 100 are down 9% and 23%, respectively. These non-confirmations are important, because markets almost always splinter when big changes in social mood are afoot... It's only a matter of time before the broad indexes abandon the bull-market party.

As we all know, abandon it they did -- big-time!

And, it's notable that our global analysts' forecast for the end of Europe's "bull-market party" occurred about two months before coronavirus flared up in China -- and six weeks before the outbreak hit Europe.

So, clearly, our bearish European forecast was not based on the coronavirus.

We base our financial forecasts on technical indicators and the Elliott wave model, not the news.

Now is the time to learn what our analysts expect next for major global stock markets by reading our Global Market Perspective.

Follow the link below to find out about our 30-day, risk-free trial.

Prepare Now for a Major Global Monetary Event

If EWI’s analysis is correct, the next major global monetary event will be deflation.

Deflation is rare.

The 2007-2009 global financial crisis was a brush with deflation. The last “all-out” deflation was in the early 1930s. No doubt – you know what happened then. It was a financially scary time – to say the least.

Get insights into why you should get ready now for another deflationary episode.

The global stock market downturn is a lesson in how quickly financial conditions can change.

Now – prepare for what’s likely next.

Open up the pages of our Global Market Perspective and learn what our analysts are sharing with subscribers. You can do so risk-free for 30 days.

Just follow the link below to get started.

EXCLUSIVE

Want Proof Markets Are NON-Rational? See This.

How can 1400 individual stocks, governed by a myriad of individual factors, fit into the same technical market pattern? There is only one logical answer. Watch our Asian-Pacific expert explain -- and show you how the COVID-19 pandemic fits into the same pattern.

Here’s How to Use Cultural Trends to Spot a Market Juncture

What did Disney’s dominance and horror’s resurgence tell us about the stock market? A lot, actually. Discover how we used developments in movies, pop music, business and politics to foresee a major positive mood extreme, and get a preview for where social trends are headed next.

GBPUSD: From 35-YEAR Low to 3-Week High. Did You See That Coming?

The British Pound recently hit a 35-year low against the US Dollar, yet in a matter of days rose in a 9-plus percent rally thru March 27. There's only one way that forex traders enjoy moves like these -- and that's with a "saw-that-coming" forecast.