You can blame the massive popping of China's Shanghai Composite bubble for being the cause of all the downside volatility in global markets last year. From a technical standpoint, this year isn't looking much better. 

When that pop came last June, the world's major stock averages started declining from their 2015 highs to new lows ranging from 12.5% to 24.7% as the Shanghai plunged 44.9%. This contagion has continued in the first week of 2016, with the Shanghai Composite down 10% so far this year. The other major averages are down between 4.3% and 8.3%. 

In the fourth quarter there were short-term technical rallies that crossed what market technicians call Fibonacci retracements. This is the preferred technical tool to use when markets are not trending up or down. However, since the end of last year, the markets have been cascading below these retracements quickly. Some averages have already traded to lower lows.

So what's next?

Here's a scorecard before we take a technical trip around the world.

 

Here's the daily chart for China's Shanghai Composite.


Courtesy of MetaStock Xenith

The Shanghai Composite had a close of 3.186.41 on Friday, down 10% year to date, and remains deep into bear market territory 38.5% below its June 12 high of 5,178.19. The Fibonacci retracement levels are from this high to the Aug. 26 low of 2,850.71. The Chinese benchmark slipped another 5.3% on Monday to 3,016.70.

The Shanghai Composite has been below its 38.2% retracement of 3,743.57 since Aug. 21 and has been below its 23.6% retracement of 3,403.55 since Jan. 4.

Here's the daily chart for Japan's Nikkei 225.


Courtesy of MetaStock Xenith

The Nikkei 225 closed Friday at 17,697.96, down 7% year to date and in correction territory 15.5% below the multiyear high of 20,952.71 set on June 24. The Fibonacci retracement levels are from this high to the 2015 low of 16,901.49 set on Sept. 29.

The Nikkei 225 ended 2015 above its 50% retracement of 18,928.02, then cascaded below its 38.2% retracement of 18,449.87 on Jan. 5, then below its 23.6% retracement of 17,858.26 on Jan.7. The index is just 4.7% above its 2015 low of 16,901.49 set on Sept. 29.

This index is below its pre-crash 2008 high of 18,300 set in March 2007.

Here's the daily chart for India's Nifty 50.


Courtesy of MetaStock Xenith

The Nifty 50 closed at 7,601.35 on Friday, down 4.3% year to date and remains in correction territory 16.6% below its all-time high of 9,119.20 set on March 4. The Fibonacci retracement levels are from this high to the Sept. 8 low of 7,539.50. 

The Nifty 50 ended 2015 above the 23.6% retracement of 7.913.77 and ended last week just 0.9% above the Sept. 8 low. The India benchmark opened Monday below its 2015 low trading to a 52-week low of 7,494.15, then recovered back above the prior low.

Here's the daily chart for Germany's Deutsche Boerse DAX.


Courtesy of MetaStock Xenith

The German DAX closed at 9,849.34 on Friday, down 8.3% year to date, and is in bear market territory 20.5% below its all-time high of 12,390.75 set on April 10. The Fibonacci retracement levels are from this high to the Sept. 29 low of 9,325.05.

The DAX ended 2015 just below its 50% retracement of 10,857.65, then gapped below its 38.2% retracement of 10,495.68 as 2016 began. Last week ended with the index below its 23.6% retracement of 10,047.82. Monday morning the DAX opened lower but recovered.

Here's the daily chart for the Dow Jones Industrial Average (INDU) .


Courtesy of MetaStock Xenith

The Dow industrials closed at 16,346.45 on Friday, down 6.2% year to date and is in correction territory 10.9% below its all-time high of 18.351.36 set on May 19. The Fibonacci retracement levels are from this high to the Aug. 24 low of 15,370.33.

The Dow 30 ended 2015 above its 61.8% retracement of 17,215.03, then cascaded below it on Jan. 4 and below its 50% retracement of 16,862.68 on Jan. 7, then below its 38.4% retracement of 16,510 on Friday, Jan. 8. The 23.6% retracement is a support of 16,074.38.

Here's the daily chart for the S&P 500 .


Courtesy of MetaStock Xenith

The S&P 500 closed at 1,922.03 on Friday, down 6% year to date, and is in correction territory 10% below its all-time high of 2,134.72 set on May 20. The Fibonacci retracement levels are from this high to the Aug. 24 low of 1,867.01.

The S&P 500 ended 2015 above its 61.8% retracement of 2032.5 then cascaded below it on Jan. 4 and below its 50% retracement of 2,000.91 on Jan. 7, then below its 38.4% retracement of 1,969.31 on Jan. 7, then ended the week Just below its 23.6% retracement of 1,930.22.

Here's the daily chart for the Nasdaq Composite (NDAQ) .


Courtesy of MetaStock Xenith

The Nasdaq closed at 4,643.63 on Friday, down 7.3% year to date, and is in correction territory 11.2% below its all-time high of 5,231.94 set on July 20. The Fibonacci retracement levels are from this high to the Aug. 24 low of 4,292.14.

The Nasdaq ended 2015 well above its 61.8% retracement of 4,874.30 and did not close below it until Jan. 6. The Nasdaq cascaded below its 50% retracement of 4,762.90 on Jan. 7 and then its 38.2% retracement of 4,651.51 on Jan. 8 leaving the 23.6% retracement as the key level to hold of 4,513.67.

Here's the daily chart for the Dow Jones Transportation Average.


Courtesy of MetaStock Xenith

Dow Transports closed at 6,946.36 on Friday, down 7.5% year to date and in bear market territory 25.4% below its all-time high of 9,310.33 set on Nov. 28, 2014. Transports already crashed below its Aug. 24 low of 7,452.70 as a significant warning.

The transports ended 2015 just above its 2015 low and it failed to hold on Jan. 4 opening the floodgates lower. This is quite an ugly chart.

Here's the daily chart for the Russell 2000.


Courtesy of MetaStock Xenith

The Russell 2000 closed at 1,046.20 on Friday, down 7.9% year to date and in correction territory 19.3% below its all-time high of 1,296.00 set on June 23. This is just above the bear market threshold of being down 20%. The small-caps index crashed below its Sept. 29 low of 1,078.63 on Jan. 7, which is a significant warning. A key chart support is the Oct. 15, 2014, low of 1,040.47

This article is commentary by an independent contributor. At the time of publication, the author held no positions in the stocks mentioned.