I last wrote an update about the World Market Index on January 8th.

Since then, this index has continued to drop below the critical support level of 1600 and price now sits just below the next support level of 1550.

As you can see from the 5-Year Daily chart below, it’s a long way down to major support at 1350. All three indicators point to lower prices…but, the swings are large, and we may see some kind of bounce, although it’s not clear as to when or at what level that may occur.

If the U.S. markets are going to lead global markets to some kind of bounce, it’s worthwhile monitoring the price action of the SPX and the SPX:VIX ratio, as I discussed in my post of January 15th, for possible clues as to timing of such a bounce.

Additionally, you can see from the 5-Year Daily comparison chart below of the SPX and USB (30-year U.S. Bonds) that, at times they traded in opposite directions, but were, more or less, in demand from the beginning of 2014, until January of last year, when they uncoupled, once more, and the swings on USB became very volatile. Furthermore, we now see, once again, a bearish Death Cross formation on the SPX, which hints of further downside movement, as do the lower lows on the RSI and MACD indicators. So, let’s examine the price action more closely on USB.

The following 5-year Daily chart of USB shows that price has now broken above triangle resistance and major price resistance of 155. While we have new “buy” signals on the MACD and PMO indicators, and the RSI is still rising above the 50 level, we don’t quite have a bullish Golden Cross formation yet on the 50 and 200 MAs…although, it appears to be imminent. If price can rally and hold above the 60% Fibonacci retracement level around 160, there’s a good chance that it will continue…which may, in turn, negatively or positively influence price action on the SPX.