Below we provide one-year trading range charts for the major equity indices of 20 countries around the world. In each chart, the white line represents the index’s 50-day moving average, while the light blue shading represents its “normal” trading range. This is calculated as one standard deviation above and below the 50-day moving average. The red zone in each chart represents between one and two standard deviations above the 50-DMA, and moves into or above this area are considered overbought. The green zone represents between one and two standard deviations below the 50-DMA, and moves into or below this are are considered oversold.
As you’ll see when browsing through the charts, there are lots of both short-term and long-term downtrends in place — some steep and some not so steep. As of this morning, only one country (Malaysia) was above its 50-day moving average, while Australia is sitting right on its 50-day. The rest of the countries are either at the bottom of their trading ranges or in oversold territory.
Trends end with a turning point, and it’s going to take some form of positive news for all these downtrends to turn back into uptrends. An end to the epic decline in oil prices seems like the most likely thing that could turn around all these downtrends.