Global equity technical - Rebound ending (CIMB)

Global equity markets rebounded this week after the sharp correction in mid-June, in line with our forecast. However, the current rebound could end soon. S&P500 daily chart shows a potential "Head & Shoulder" formation with the crucial neckline at 890 points. If neckline is broken, the H&S target is at 820 points. US Dollar Index daily chart shows MACD on the verge of confirming its negative "dead cross". This could indicate weakness ahead for the index. A break below 78.3 points would mean the minor wave (v) down-leg is taking place. MSCI Asia ex-Japan Index broke below its major support trend line in mid- Jun and since then, the index has been trading just below the major support-turned resistance trend line. Key resistance is at 398 points. We see no reason to turn positive on global equity markets unless a stronger than expected rebound takes the markets above the June highs.