Secondary correction, but watch Fedex

The weekly S&P 500 chart suggests retracement to the new support level at 1370. No major deviation on 13-week Twiggs Money Flow indicates this is merely a secondary correction. Respect of 1350 would signal a primary advance. Long-term target for the breakout is 1600*.

S&P 500 Index

* Target calculation: 1350 + ( 1350 – 1100 ) = 1600

Nasdaq 100 Index similarly displays a bearish divergence on 21-day Twiggs Money Flow but no major deviation on the 13-week indicator, suggesting a secondary correction to the long-term rising trendline.

Nasdaq 100 Index

* Target calculation: 2400 + ( 2400 – 2050 ) = 2750

Bellwether transport stock Fedex, however, displays a stronger bearish divergence, on 13-week Twiggs Money Flow. Failure of support at 88.00 would indicate reversal to a primary down-trend; follow-through below 86.00 would confirm. A Fedex down-trend would warn that economic activity is slowing.

Fedex

Europe follows through

Dow Jones Europe Index followed through above Friday’s high of 262, confirming the breakout and signaling a primary advance to 310*. Rising 21-day Twiggs Momentum signals a strong trend. Immediate target for the breakout is 270, then expect further retracement to test the new (260) support level.

Dow Jones Europe Index

* Target calculation: 260 + ( 260 – 250 ) = 270;  260 + ( 260 – 210 ) = 310

The Hourly chart gives a more detailed perspective, with a sharp fall to test support at 260 followed by a surge through resistance at 262. 24-Hour Twiggs Momentum holding above zero reflects a healthy (secondary/medium-term) rally.

Dow Jones Europe Index Hourly Chart

Selling pressure warns of correction

Medium-term selling pressure, signaled by bearish divergence on 21-day Twiggs Money Flow, continues to warn of a correction in US and Asia-Pacific markets. The Dow Jones TSM (formerly “Wilshire”) Asia-Pacific Index displays a bearish divergence since mid-February. Reversal below 1280 would confirm a correction.

Dow Jones TSM Asia-Pacific Index

Dow Jones Industrial Average shows a similar bearish divergence, though the latest down-turn was exaggerated by triple-witching hour [TW] on Friday. Reversal below 12750 would confirm a correction.

Dow Jones Industrial Average

Australia: ASX 200

The ASX 200 continues in a narrow consolidation between 4300 and 4150, indicating uncertainty. Rising 13-week Twiggs Money Flow is a positive sign and recovery above 10% would suggest a primary up-trend. Breakout above 4300 would likewise suggest an up-trend, while follow-through above 4400 would confirm.

ASX 200 Index

* Target calculation: 4400 + ( 4400 – 3800 ) = 5000

Hong Kong & China

Hong Kong’s Hang Seng Index is in a primary up-trend. Having retraced briefly, it appears to have found support at 21000. Recovery above 21500 would signal an advance to 22500*.

Hang Seng Index

* Target calculation: 20000 + ( 20000 – 17500 ) = 22500

The Shanghai Composite Index, however, remains in a primary down-trend. Breakout above 2500 would, however, suggest that the trend is weakening. Respect of support at 2300 would suggest reversal to a primary up-trend, while failure of support would warn of another decline.

Shanghai Composite Index

* Target calculation: 2100 – ( 2500 – 2100 ) = 1700

Japan & South Korea

Japan’s Nikkei 225 Index broke through resistance at 10000. Follow-through above 10200 would indicate a further advance as signaled by sharply rising 13-week Twiggs Money Flow. The rally is becoming dangerously extended and a correction to test support would add stability.

Nikkei 225 Index

* Target calculation: 10000 + ( 10000 – 9000 ) = 11000

South Korea’s Seoul Composite Index is already in a primary up-trend. Respect of the zero line by 13-week Twiggs Money Flow again signals strong buying pressure. Follow-through above 2050 would signal an advance to 2200*.

Seoul Composite Index

* Target calculation: 1950 + ( 1950 – 1700 ) = 2200

India & Singapore

The Sensex respected support at 17000. Recovery above 18000 would indicate a primary up-trend and follow-through above 18500 would confirm. Respect of zero by the latest trough on 13-week Twiggs Money Flow would further strengthen the signal. Target for the advance is 21000*.

BSE Sensex Index

* Target calculation: 18 + ( 18 – 15 ) = 21

The NSE Nifty shows a similar pattern. Follow-through above 5600 would offer a target of 6200*.

NSE Nifty Index

* Target calculation: 5400 + ( 5400 – 4600 ) = 6200

Singapore Straits Times Index is already in a primary up-trend, as signaled by 63-day Twiggs Momentum holding above zero. Recovery above 3000 confirms an advance to 3300*.

Singapore Straits Times Index

* Target calculation: 2900 + ( 2900 – 2500 ) = 3300

Europe on the rise

Dow Jones Europe Index broke through 260 to signal a primary up-trend. Respect of the zero line by 13-week Twiggs Money Flow confirms strong buying pressure. Target for the advance is 310*.

Dow Jones Europe Index

* Target calculation: 260 + ( 260 – 210 ) = 310

Italy’s MIB Index reflects a similar pattern, signaling an advance to 21000*.

FTSE MIB Index

* Target calculation: 17000 + ( 17000 – 13000 ) = 21000

The FTSE 100 is already in a primary up-trend. A trough high above zero on 13-week Twiggs Money Flow indicates strong buying pressure and a likely breakout above resistance at 6100.

FTSE 100 Index

* Target calculation: 5700 + ( 5700 – 5000 ) = 6400

The DAX shows similar strong buying pressure and breakout above the 2011 high of 7500 is likely.

DAX Index

* Target calculation: 6400 + ( 6400 – 5400 ) = 7400

Canada: TSX 60 Index

Canada’s TSX 60 Index found support at 700, above the rising trendline. Respect of the zero line by 13-week Twiggs Money Flow indicates a primary up-trend. Recovery above 720 would confirm an advance to 790*.

TSX 60 Index

* Target calculation: 720 + ( 720 – 650 ) = 790