Category: Stock Markets

Analysis of major stock markets around the world.

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Dow and S&P 500 test key resistance

Dow Jones Industrial Average is testing resistance at 12800. A large bearish divergence would be completed if 13-week Twiggs Money Flow retreated below 10% — and would warn of a bull trap. Reversal below medium-term support at 12300 and the rising trendline would also warn of trend weakness, while respect of these levels would indicate a primary advance to 13400*.

Dow Jones Industrial Average

* Target calculation: 12300 + ( 12300 – 11200 ) = 13400

The S&P 500 displays similar weakness on 13-week Twiggs Money Flow, but rising 63-day Twiggs Money Flow indicates trend strength. Breakout above 1370 would indicate an advance to 1450*.

S&P 500 Index

* Target calculation: 1300 + ( 1300 – 1150 ) = 1450

The Nasdaq 100 made a strong breakout above 2400, indicating a primary up-trend. Expect a retracement to test the new support level (2400); respect would confirm the up-trend.

Nasdaq 100 Index

* Target calculation: 2400 + ( 2400 – 2150 ) = 2650

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Japan & South Korea

Declining 13-week Twiggs Money Flow continues to warn of selling pressure on Japan’s Nikkei 225 Index. Breakout below the rising trendline would indicate another primary down-swing; confirmed if support at 8100 is broken.

Nikkei 225 Index

* Target calculation: 8000 – ( 9000 – 8000 ) = 7000

Seoul Composite Index, on the other hand, followed through above 1950 to strengthen the primary up-trend (signal). Recovery of 13-week Twiggs Money Flow above its late-2011 high would confirm the signal.

Seoul Composite Index

* Target calculation: 1950 + (1950 – 1750 ) = 2150

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China & Hong Kong

Shanghai Composite Index is testing resistance at 2300 but there is no clear breakout from the trend channel to indicate a trend change. Respect would signal a down-swing to test the lower trend channel around 2000*.

Shanghai Composite Index

* Target calculation: 2150 – ( 2300 – 2150 ) = 2000

Hong Kong’s Hang Seng Index followed through above 20000 to confirm the breakout signaling the start of a new up-trend. Target for the initial advance is 22500*.

Hang Seng Index

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

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Singapore breakout and Indian buying pressure

BSE Sensex broke out of its trend channel last week, signaling the primary down-trend is weakening. A sharp rise in 13-week Twiggs Money Flow confirms buying pressure. Breakout above 18000 would indicate the start of a new up-trend, with an initial target of 20500*.

BSE Sensex Index

* Target calculation: 18000 + ( 18000 – 15500 ) = 20500

Singapore Straits Times Index held onto its gains, closing the week above 2900. Expect a primary advance with a target of 3200*.

Singapore Straits Times Index

* Target calculation: 2900 + ( 2900 – 2600 ) = 3200

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ASX 200 weakly bullish

The ASX 200 breched its descending trendline, indicating that the primary down-trend is over. Breakout above 4400 would signal the start of a new up-trend. Twiggs Money Flow (13 week) continues to oscillate around the zero line, however, suggesting weakness.

Index

* Target calculation: 4400 + ( 4400 – 4000 ) = 4800

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Canada: TSX 60

Canada’s TSX 60 index broke resistance at 715 to signal a primary up-trend. Rising 13-week Twiggs Money Flow indicates buying pressure. Target for the initial advance is 785*.

TSX 60 Index

* Target calculation: 715 + ( 715 – 645 ) = 785

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Europe: UK and Germany signal bull market

The FTSE 100 broke through resistance at 5750 to signal a primary up-trend. Rising 13-week Twiggs Money Flow indicates medium-term buying pressure. Target for the initial advance is 6300*.

FTSE 100 Index

* Target calculation: 5700 + ( 5700 – 5100 ) = 6300

Germany’s DAX also signals a primary up-trend, with a target of 7400* for the initial advance.

DAX Index

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

Italy’s MIB index lags behind, but breakout above 17000 would give a similar signal, with a target of 20000*.

FTSE MIB Index

* Target calculation: 17000 + ( 17000 – 14000 ) = 20000

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Bull market signaled as liquidity soars

Central banks are flooding the markets with liquidity, causing stocks to rise despite weak fundamentals. Large bearish divergences on 13-week Twiggs Money Flow for Dow Industrials and the Nasdaq 100 highlight the precarious nature of the current rally. But, as I said earlier, don’t bet on this ending before the November election.

Dow Jones Industrial Average broke resistance at 12800, joining the Nasdaq 100 above its 2011 high. All four major indices display a primary up-trend, collectively signaling a bull market. Rising 13-week Twiggs Money Flow indicates medium-term buying pressure on the Dow and target for the initial advance is 13400*.

Dow Jones Industrial Average

* Target calculation: 12300 + ( 12300 – 11200 ) = 13400

The S&P 500 is a little way behind, but rising 13-week Twiggs Money Flow indicates buying pressure. Breakout above 1370 is likely to confirm an advance to 1450*.

S&P 500 Index

* Target calculation: 1300 + ( 1300 – 1150 ) = 1450

The Nasdaq 100 index followed through above 2500, confirming the primary up-trend, while rising 13-week Twiggs Money Flow indicates medium-term buying pressure.

Nasdaq 100 Index

* Target calculation: 2400 + ( 2400 – 2150 ) = 2650

Dow Jones Transport Average is also in a primary up-trend; and headed for a test of resistance at 5600. New highs on 13-week Twiggs Money Flow indicate long-term buying pressure.

Dow Jones Transport Average

* Target calculation: 5000 + ( 5000 – 4500 ) = 5500

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Sellers still dominate Japan, South Korea

Japan’s Nikkei 225 is headed for a test of resistance at 9000, but 13-week Twiggs Money Flow trends downwards — indicating that sellers are dominant. Respect of resistance would warn of another test of primary support at 8000.

Nikkei 225 Index

South Korea’s Seoul Composite index retreated from resistance at 1960. Again we have down-trending 13-week Twiggs Money Flow, warning that sellers dominate the market. Breakout above 1960 is unlikely, while respect would suggest another test of primary support at 1750.

Seoul Composite Index

* Target calculation: 1950 + ( 1950 – 1750 ) = 2150

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