Vanguard Total World Stock ETF (VT)
Click to Enlarge The current selloff is a global problem with its roots in the emerging markets, so the best gauges right now are those that provide a global perspective. In this sense, Vanguard Total World Stock ETF (VT) is poised to provide an earlier warning than any of the U.S. indices.
The VT gives a proportional weighting to all global equities; as such, it incorporates all regions and market cap tiers.
Right now, VT is perched directly on top of its 200-day moving average. As the accompanying charts show, VT broke its 200-day MA at various points within the past two years and went on to recover the majority of its lost ground in fairly short order. This indicates that a break of the 200-day isn’t a guarantee of disaster. However, it also should be noted that the two-year support line currently terminates at $54.30 — not far below the 200-day.
VT therefore is in a position at which even a modest additional selloff will create a troubling technical picture. Watch this Vanguard ETF’s charts for a clue as to whether the S&P 500 will be able to hold its support levels.