Chart of the Day - Wednesday, February 17th, 2021

Today’s Chart of the Day was shared on Twitter by Macro Charts (@MacroCharts). It's a chart of the MSCI World Index over the past three decades. Macro Charts points out that global breadth is extremely strong right now. The indicator on the chart shows that nearly all global stock markets are in uptrends, as defined by a rising 200-day moving average. We can add this to the long list of indicators that are "overbought" right now, but let's not forget, overbought readings are often bullish long-term signals. Especially in the case of this particular indicator. Could we get a 5% or 10% correction in the near-term? Sure! But as Macro Charts notes, these global breadth thrusts have historically been observed at the start of bull markets, not at the end. Risk management is always important, but top-calling seems futile in the context of some of these long-term bullish developments.