NEW YORK (TheStreet) -- The financial crisis in Greece has caused extreme stock market volatility in the stock markets around the globe from China, through Europe and into the United States. Here are the top 10 technical chart setups to focus on.
All charts are Courtesy of MetaStock Xenith
The Shanghai Composite ended Monday's session at 4,053.03. While the index is still up 25.3% year to date, the decline since it set a multiyear intraday high of 5,178.19 on June 12 puts the index into bear market territory, down 21.7% at Monday's close. At Monday's reaction low of 3,875.05 the decline from June's high to low was 25.2%.
Note that the weekly chart below shows that Shanghai Composite traded well above its 61.8% Fibonacci retracement of the decline from its all-time intraday high of 6,124.04 set in October 2007 to the multiyear intraday low of 1,664.93 set in October 2008. Under the 61.8% Fibonacci retracement of 4,422.71 the risk was to the 50% retracement of 3,894.38 which held at Monday's low.
If China's bear market intensifies, the next down side is to the 38.2% retracement of 3,366.05. The long-term reversion to the mean is the 200-week simple moving average of 2,628.57 and rising each week. If the Shanghai Composite ends June on Tuesday below May's low of 4,099.04 the index will have a monthly downside key reversal.
The Nikkei 225 Index gapped lower on Monday, and closed at 20,109.45, ending the session below its 50-day simple moving average of 20,140.80 after setting a multiyear intraday high of 20,952.71 on June 24. The index is up 15.2% year to date, and is 4% below its recent high.
The weekly chart below shows that the Nikkei 225 traded to its highest level since December 1996, but could not capture its 50% Fibonacci retracement of the Japanese crash which began 25.5 years ago in December 1989, when the all-time high was 38,957.44. The 38.2% retracement is a technical support of 19,195.41 with the 50% retracement a resistance of 22,966.96.
The Deutsche Boerse DAX Index fell into correction territory on Monday trading as low as 10,964.24, down more than 10% from its quantitative easing all-time intraday high of 12,390.75 set on April 10, 2015.
The daily chart for the DAX index failed at its 50-day simple moving average of 11,486.20 last Friday which indicates risk to the 200-day simple moving average of 10,576.62.
We know that the Dow Jones Industrial Average had a negative weekly chart after the index closed at 17,946.68 on Friday, below its key weekly moving average of 17,990.96. The key level to hold on the daily chart below is the 200-day simple moving average of 17,678.18.
The Standard & Poor's 500 has a negative weekly chart with the close of 2,101.49 on Friday below its key weekly moving average of 2,103.01. The key level to hold on the daily chart below is the 200-day simple moving average of 2,053.60.
The Nasdaq Composite opened below its 50-day simple moving average of 5,050.62 with the 200-day simple moving average of 4,798.55. The weekly chart below will shift to negative on a close this week below its key weekly moving average of 5,055.86. Note that the weekly momentum reading is projected to decline to 77.25 this week, down from 81.14 on June 26. The index would thus have momentum declining below the overbought threshold of 80.00.
The Dow Transportation Average remains negative but oversold, which is a sign of economic weakness in the U.S. economy. The key weekly moving average is 8,479.20. Transports remain solidly in correction territory.
The Russell 2000 remains above its key weekly moving average of 1,162.33, with its weekly momentum reading projected to rise to 77.25 this week up from 75.58 on June 26. The weekly chart below is thus the key to declare that the bears have won the tug-of-war with the bulls. Friday's close needs to be below 1,262.33 with the momentum reading declining below 75.58.
As another sign of U.S. economic weakness, the PHLX Semiconductor Index, also known as the SOX, had a negative weekly chart with Friday's close of 698.36, below its key weekly moving average of 713.60.
The Dow Utility Average is negative with the index below its key weekly moving average of 572.62, and with a 200-week simple moving average of 508.78. This dividend-heavy index is attempting to rebound as a flight to quality, but it ended last week in correction territory, 15% below its all-time high of 618.08 set on Jan. 29.