Weekly appointment with the most watched charts in the world.
Over the past two editions the Chart of the Week had focused on the S&P 500, with the system entering short on quantitative excesses and waiting for a price signal coherent with the statistical setup.
This week the focus shifts to Brent Crude Oil. Not because of a new operational signal, which still remains absent, but because oil now represents one of the most delicate points of the current inter-market picture.
The main global indices continue to display bullish structures, but with profoundly different characteristics. In the United States and Japan the dominant theme remains overextension: S&P 500 and Nikkei 225 are sitting at extremely elevated distances from their respective MA200W, on statistically rare levels. In Europe the picture appears more articulated: DAX, Eurostoxx50 and FTSE MIB maintain bullish structures but are starting to show compression and distribution dynamics at the highs.
In this context Brent continues instead to lag behind. And it is precisely this lag that represents the most interesting data point of the week.
Should oil confirm its bullish setup, the inverse correlation that historically tends to re-emerge in phases of inter-market tension could turn into the catalyst for the correction expected on the indices. Conversely, a structural breakdown of Brent would leave room for a further continuation of the global risk-on move.
Oil, in other words, is not yet confirming anything. But this very lack of confirmation is itself becoming the main element to monitor.
