A Global Stock Market Break Out Is Now Happening

Stocks In Rally Mode

Stocks rallied on January 25 with the S&P 500 rising by over 80 basis points to 2,664. The index continues to work its way higher, recouping the losses from the selloff earlier this week. The rise today, left a pretty big gap in the chart that may be to filled on Monday or early next week around 2,640. Don’t be surprised to see a 1% pullback early next week.

But more important is that it would seem the global rally we noted about a week or so ago is slowly taking hold.

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spx, sp500

Hong Kong (HSI)

Hong Kong had a big break out last night, as the PBOC continues to try to boost the economy in China. The Hang Seng increased above a critical level of resistance at 27,350, and now it seems to be on pace to rise to 28,200.

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hang seng

Shanghai

Shanghai is nearing a break out at 2,654.

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shanghai

KOSPI

The South Korean Kospi appears to be well on its way to 2,210.

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kospi

Germany (DAX)

Even the German DAX is now back above a long-term downtrend and could be on its way higher.

dax

Again, hard to deny the movements in prices. Now the bigger question –is it a bounce and do we see a reversal once we get to the next levels of resistance? It would be naïve to think it isn’t possible. But remember it was the divergence in equity prices that everyone was pointing to in 2018 as a warning sign. At least to start 2019 the indexes seem to be converging and moving higher together. It would suggest to me that the money is flowing into equities globally, and that suggests a reversal is less likely.

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Semis

It is a big positive when even Intel’s disappointing earnings could not cool down the red-hot chip sector. The SOXX ETF and SMH ETF were both up another 2% today, on top of yesterday’s significant gains.

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Disclosure: Michael Kramer and the clients of Mott Capital own Acadia and Apple

Disclaimer: This article is my opinion and expresses my views. Those views can change at a moment's notice ...

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