This post was written exclusively for Investing.com
It may not be the only index that is about to break out. The iShares MSCI ACWI ETF (NASDAQ :), a proxy for the MSCI ACWI index, appears to be about to make a major outbreak. The ETF reached a peak in January 2018 and has since traded sideways. It literally trades today for almost the same price as in February 2018.
Now, the ETF is knocking on the door of a major outbreak after having risen three times no more than $ 75.20 since April 2019. So far, it has avoided the dreaded triple-top reversal pattern. It means the ETF is almost back to its highest point ever around $ 77.70 and possibly goes further. Since February 1, 2018, the ETF has been 1.3% lower compared to the gain of the SPDR S&P 500 ETF & # 39; s (NYSE 🙂 of around 6.5%.
A major outbreak is approaching
The graph shows that since February 2018 the ETF has traded essentially between $ 69.75 and $ 75.20, except for the draw in the fourth quarter of 2018. The region around $ 75.20 has a very strong resistance for the ETF acted since May 2019.
The ETF achieved technical resistance three times at $ 75.20 level in 2018: in May, July and September. Every time the index did not exceed the resistance level. Two of those times, in May and in August, it could keep technical support at $ 69.75. However, after the ETF failed to resist in September, it reached a low point and created the start of a new upward trend.
Moreover, the chance that the ETF is trying to break out for the fourth time is increasing. That's because the ETF was able to prevent a bearish reversal pattern that is known as a triple top. In general, stocks and indices tend to penetrate resistance in the fourth attempt.
The relative strength index also shows that the bullish momentum in the ETF is building because it is slowly rising and is very close to breaking its own down trend.
Ex-U.S. is an outbreak approaching?
Interestingly, the iShares MSCI ACWI ex US (NASDAQ 🙂 exhibits similar bullish trends. Although the graph looks different, it shows that the ETF has recently broken a falling trend. However, the ETF faces a resistance region between $ 47 and $ 48. If that region can be deleted, it seems that the ETF can rise to around $ 50.75.
In general, market trends appear bullish – and in some cases very bullish. It feels like the market is waiting for something to make its next giant leap higher. Maybe that big leap comes in November after the next FOMC, the third-quarter gain or after the meeting of Chinese President Xi and US President Trump during the Asia-Pacific Economic Cooperation (APEC) in Chile in the week of November 11 .
750 points?
As we get closer to a potential market outbreak for the S&P 500 and world markets, another striking observation becomes apparent that goes back to the year 2009. Each time the S&P 500 rallied after a consolidation period, such as last During the week discussed, the S&P 500 increased by almost the same amount, around 725 to 750 points.
Only time will tell if the next important stage of the bull market is coming at us, which defies many skeptics. Although it is impossible to know for sure what happens next, it is certainly very nice to find all the pieces and then merge them all together.
