As of 05/27/22 the US stock market represented by the S&P 500 (SPX) was 13.70% below its all-time high made on 01/04/22. On 05/27/22 the UK 100 (UKX) was 4.27% below its all-time high made on 05/22/18 and only 1.58% below its 2022 high made on 02/10/22.
The 05/15/22 blog “Bullish Stock Signals From Europe and Asia” illustrated that UKX was the most bullish of four national stock indices. UKX is leading on the upside and appears to be in position for a thrust up to at least a new 2022 high.
The daily UKX chart courtesy of Trading View illustrates the recent action.
UKX has broken above the upper trend line of an indecision triangle, which also appears to be the ending portion of an Elliott wave – Horizontal Triangle that began at the 02/10/22 top. If so then the 05/19/22 bottom was the termination point of the Horizontal Triangle. Usually after a Horizontal Triangle there’s a strong thrust in the direction of the primary trend – which in this case is up.
UKX is near an area of declining tops which are logical points to place stop buy orders . Because the tops are in proximity to each other its possible that triggering stop buy orders on the lowest peak could propel the UKX to the next top and stop buy orders. Like falling dominos, a series of triggered stop buy orders could quickly propel the UKX to a new 2022 high.
US and European stock generally trend together, if in the next one or two weeks UKX continues to rise, US stocks are likely to follow.
Traders are long 100% SPX related non-leveraged funds. Continue holding long.