Below looks at the Wilshire 5000, one of the broadest stock indices in the world. This key index is undergoing a key “strength test” right now!
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Line (1) became key resistance for months and months in 2015.
A couple of months ago the Wilshire Index broke above key resistance, which was a positive sign of strength. Softness of late has taken the index to test old resistance as new support at (2).
The Global Risk On trade wants/needs support to hold at (2). If it does, it would send a positive message to stocks in the states and potentially globally.
If the Wilshire is to remain strong, support needs to hold at (2)!