Eoin Treacy's view With so many indices breaking out of well defined trading ranges and a significant number hitting new all time highs I thought it might be instructive to run the Chart Library's Performance and High/Low filters in order to see if any additional information is generated.

Here are detailed instructions on how to use the Chart Library's Filters:

How do I create a list of my favourite instruments?

How do I use the Chart Library's Performance Filter?


The best performing markets over the last 12 months have been concentrated in Asia and Latin America with some small cap markets leading the table. Sri Lanka and Bangladesh have both more than doubled in the last 12 months while previous leader Tunisia pulled back sharply today. This is the largest reaction within its almost two-year uptrend and at the very least is a shot across the bows of this impressive uptrend. A sustained move to new highs would now be required to question potential for at least a consolidation of recent gains.

The first developed markets on the Performance Filter list are Denmark at 18, Sweden at 28 and Singapore at 29. ASEAN markets profiled in yesterday's Comment of the Day are well represented as are commodity producing Latin American countries such as Chile, Colombia, Argentina and Peru. Both Mexico and Brazil show up on the High/Low filter results since they broke upwards to new all time and 3-month highs respectively in the last 5 days.

Of the 92 indices in the Performance Filter 52 are hitting at least new 3-month highs with 22 hitting new 12-month highs or better. Only five have made new lows in the last five days and even Greece and the Topix 2nd section have rallied off those levels.

This is a sweet spot for equity indices and commodities, particularly the precious metals which are also hitting new highs. The US Dollar is becoming increasingly overextended to the downside as the above indices are pulling away from their 200-day MAs. The risk-on/risk-off pattern of financial markets that has developed over the last 18-months would suggest that this inverse correlation is still very much in evidence and that the first significant rally for the US Dollar is likely to be a warning for some of the more overextended
'risk assets'.

The Dollar Index has fallen abruptly over the last month and this is its fourth consecutive week to the downside. It is becoming increasingly overstretched as it approached the December lows near 75 but a clear upward dynamic sustained for more than a day or two would be required to indicate demand is returning to dominance.