The technicals for the five major U.S. equity averages began to show signs of stress last week, and the downside risk clearly came through on Wednesday. This decline is being consolidated, but technical damage has been done.
The Dow Jones Industrial Average (INDU) , S&P 500
The Nasdaq Composite (NDAQ) also set its all-time intraday high of 6,170.16 on May 16, but could end the week below last week's low of 6,075.68, which is a weekly "key reversal."
Overseas, the Nikkei 225 set its 2017 high of 19,989.94 on May 11, but ended the week with a "key reversal." The Shanghai Composite is below its 50-day and 200-day simple moving averages of 3,191.16 and 3,140.09 and continues to have a negative weekly chart.
The Nifty 50 set an all-time intraday high of 9,532.60 on May 17, and does not have a negative divergence. The German DAX has a positive but overbought weekly chart and set its all-time intraday high of 12,841.66 on May 16. If the DAX ends the week below its low of last week of 12,659.70, this would define another weekly "key reversal."
The Nikkei 25 and the Shanghai Composite remain well below their June 2015 highs of 20,952.71 and 5,178.19, respectively, with the Shanghai Composite deep in bear market territory 40.3% below its 2015 multiyear intraday high.