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Global Stock Markets Enter Bear Market as Key Indicators Turn Bearish

Market indexes are struggling to maintain momentum. Key indicators suggest a significant shift towards a bearish trend.

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2 min read
In this picture we can see a market, in which we can see some stoles and we can see few people are...
In this picture we can see a market, in which we can see some stoles and we can see few people are around.

Global Stock Markets Enter Bear Market as Key Indicators Turn Bearish

Global stock markets today are experiencing a significant shift, with major indexes entering bear market territory. This reversal comes after a period of consistent growth, with key institutions and companies influencing market strategy and sentiment.

Market indexes have halted their streak of setting new all-time highs following each dip. Instead, they now spend more time below the 5-day Exponential Moving Average (EMA) than above it. This trend is accompanied by a peculiar volume pattern: indexes rise on low volume days and plummet on high volume days. The majority of leading stocks have also stopped making new all-time highs, further indicating a bearish turn.

Notably, several prominent indexes, including $IWM, $DIA, $SPY, and $QQQ, are now trading below the 200-day Simple Moving Average (SMA). This is a clear sign of a sustained downtrend. Additionally, market breadth has narrowed, with fewer stocks driving the market higher, suggesting a lack of overall strength and conviction.

Short trading systems have emerged as more active and profitable than long systems, reflecting traders' bearish sentiment. Even the release of Federal Reserve minutes, typically a market-moving event, has failed to rally markets back into positive territory. The Relative Strength Index (RSI) is now ranging between 30 and 50, a significant departure from the 50 to 70 range seen during the previous bullish phase.

The current state of global stock markets today is marked by a clear bearish trend, with major indexes and leading stocks underperforming. This reversal is influenced by a range of factors, including the actions of major investment banks, institutional investors, and corporations. Traders' sentiment, as reflected in short trading systems' activity and market breadth, also contributes to this downturn. While the reasons behind this shift are complex, investors should remain vigilant and adjust their strategies accordingly.

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