The world stock markets are not in bear market territory yet, but

The iShares MSCI World ETF (URTH) seeks to track the performance results of the MSCI World Index. It tracks a market-cap-weighted stock index covering 85% of the developed world's market capitalization. It allocates more heavily towards US companies, with the remainder scattered among European and Asian countries.

The ETF is up less than 10 % in 2023, a bit more than 15 % since a year ago. In Elliot Wave terms, it started a 5-leg impulse wave in autumn 2022 and is currently in wave 4. Within wave 4, it has completed waves a to d and may currently be in the final wave e of wave 4. This wave should be followed by the final leg 5 of the initial 5-wave impulse wave, followed by a more significant correction.

The chart looks very similar to the chart of the NASDAQ 100, which displays the same Elliot Wave pattern. However, global stocks are at critical support levels, and there is the real danger that the bull count may be invalid if some crucial support levels do not hold. Among them are:

1. The top of the first wave up at around 117 - 118 must not be broken through downwards

2. The 50-day MA is 122.41, and the 200-day MA is 119.94. A death cross may be formed soon if the global stock markets do not start to rise from actual levels.

A potential catalyst for rising stocks, but also for cratering stocks, may be the bond markets. TIPS are at levels last seen only once in the past 20 years - during the GFC 14 - 15 years ago. They may have topped or are very near the top.

The same applies to the 20-year bonds and the 30-year bonds. The chart below shows the 20-year price action of the TLT ETF - a proxy for 20-year and 30-year treasury bonds. We have reached the top yield levels we saw early in the millennium and during the GFC. The last major yield top for the 10-year notes was in 2007 at 5.25 %. We are very close to that level, too.

We may see a flat yield curve measured between 2-year and 10-year notes very soon, indicating a short-term buying point for risk-on assets.

We need to observe the price action of the SP 500. The chart looks much worse than the NASDAQ 100 or the MSCI. There is significant support around the 4200 level. It closed below its 200-day MA on Friday, which technically is a bad sign. In March 2023, it provided a unique buying opportunity to enter the market before the start of the AI craze. A break below major Elliot wave support levels - significantly below the top of wave 1 - initial wave 1 around 4100 and wave 1 of wave 3 at 4224 - may signal that the bull count of the NASDAQ may also be rendered invalid soon after.

Sentiment has turned bearish. The Fear & Greed Index has just reached "extreme fear" levels.

We will have most of the mag-7 companies reporting earnings this week. Decision time is near.

A continuation of the 2023 bull or a resumption of the 2022 bear. We will soon know!

If you would like to (shortly) read

a) an analysis of the most likely path of inflation in 2024. It is already much lower than people think, at least in the US.

b) how the yield curve may shape up. The long end may hold negative surprises during 2024 for bondholders

c) whether, when, and what to buy on the US stock market in 2023 and 2024. There will likely be a sharply divided market. There may be a forceful bull, but not the way most people think

d) an analysis of some Asian and European stock markets. The stock market of "the sick man of Europe" may become especially attractive. Why? Because (Yes, it's true) the companies in it are not sick, mostly. The economy of the sick man is very sick, however though. But some stocks may not care.

e) what the most promising emerging markets in 2024 and 2025 may be. There is India and a lot more.

f) what the most promising hypergrowth stocks outside the US may be. Ex China!

Then, you should subscribe to this and its sister newsletter that specifically covers hypergrowth stocks. We would very much like to welcome you!