US Markets: Bearish Reversal

DJIA broke its uptrend line, SS support at 17500 in August last year. Despite a spirited rebound in October, the index failed to reclaim its uptrend line. Last week, DJIA plunged to the lows of August & September 2015. Having cracked below the "horizontal" line, AB at 16000 last Friday, DJIA must stage a convincing recovery next week. Failure to do so could see the index to retest its August intra-day low of 15400. Beyond this level, the bear market begins.


Chart 1: DJIA's weekly chart as at Jan 15, 2016 (Source: Stockcharts.com)

With slight variation, the same pattern appears in all the other major indices. Next week will be a critical week for the US markets - and the rest of the world markets.

 
Chart 2: S&P500's weekly chart as at Jan 15, 2016 (Source: Stockcharts.com)


Chart 3: Nasdaq's weekly chart as at Jan 15, 2016 (Source: Stockcharts.com)


Chart 4: Russell 2000's weekly chart as at Jan 15, 2016 (Source: Stockcharts.com)

Despite having a stronger technical outlook at the start of the year, our market had also succumbed to selling pressure. If FBMKLCI were to break below 1630, I believe we could revisit the August low of 1500 again.


Chart 5: FBMKLCI's daily chart as at Jan 15, 2016 (Source: ShareInvestor.com)