Category: Stock Markets

Analysis of major stock markets around the world.

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US markets show promise of recovery

We are not out of the woods yet, but the S&P 500 weekly chart is starting to diverge from its mid-2008 pattern. Headed for a test of the descending trendline and resistance at 1300, an index breakout would signal a primary advance to 1450* and the end of the bear market. Recovery of 63-day Twiggs Momentum above zero would support this.

S&P 500 Index

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

Dow Jones Industrial Average, however, displays short-term resistance between 12000 and 12300 on the daily chart. Reversal of 21-day Twiggs Money Flow below zero would warn of rising selling pressure.

Dow Jones Industrial Average

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

Nasdaq 100 Index is headed for resistance at 2400. Upward breakout would offer a target of 2750*. Bearish divergence on 13-week Twiggs Money Flow warns of selling pressure, but breakout above the descending trendline would negate this.

Nasdaq 100 Index

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

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Dow in strong bear rally

Dow Jones Industrial Average rallied strongly in response to news of a European rescue by major central banks. Sharp rallies are typical of shorts covering in a bear market. Strong volume indicates resistance — if you look back over the last few months (ignore triple-witching at [W]) volume above 200 million normally precedes a reversal. Expect selling pressure at 12000 to 12300, leading to a reversal. Breakout above 12300 is unlikely but would be a strong bull signal, indicating that buyers have overcome resistance.

Dow Jones Industrial Average

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Europe weakens

A monthly chart of Dow Jones Europe shows the index testing primary support at 210. A peak below zero on 63-day Twiggs Momentum indicates a strong primary down-trend. Failure of support would offer a medium-term target of 160*.

Dow Jones Europe Index

* Target calculation: 210 – ( 260 – 210 ) = 160

Italy’s MIB Index is headed for another test of primary support at 13000 on the weekly chart. Respect of the descending trendline suggests another primary decline. Reversal of 13-week Twiggs Money Flow below zero would also warn of rising selling pressure. And breach of primary support would signal a decline to 9000*.

Italian MIB Index

* Target calculation: 13 – ( 17 – 13 ) = 9

The UK’s FTSE 100 index is also headed for a test of primary support at 4800. 63-Day Twiggs Momentum peaking below zero indicates a strong primary down-trend. Failure of primary support would offer a target of 4000*.

FTSE 100 Index

* Target calculation: 4800 – ( 5600 – 4800 ) = 4000

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Canada: TSX 60 respects trendline

Canada’s TSX 60 index is testing medium-term support at 650. Respect of the descending trendline and 63-day Twiggs Momentum oscillating below zero both suggest another decline. Failure of primary support at 625 would offer a target of 580*.

TSX 60 Index

* Target calculation: 650 – ( 720 – 650 ) = 580

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S&P 500 breaks 1200

The S&P 500 index broke medium-term support at 1200 and is headed for a test of the primary level at 1100. Failure would offer a target of 900*. The 63-day Twiggs Momentum peak below zero warns of a primary down-trend.

S&P 500 Index

* Target calculation: 1100 – ( 1300 – 1100 ) = 900

NASDAQ 100 index is similarly headed for the band of primary support between 2000 and 2050. Bearish divergence on 13-week Twiggs Money Flow warns of strong selling pressure. failure of support would signal a primary decline to 1600*.

Nasdaq 100 Index

* Target calculation: 2000 – ( 2400 – 2000 ) = 1600

Dow Jones Industrial Average monthly chart shows the index testing medium-term support at 11000. The 63-day Twiggs Momentum peak below zero again warns of a primary down-trend. Breach of support would test the primary level at 10400; and failure of that level would remove any doubt regarding a bear market.

Dow Jones Industrial Average

* Target calculation: 10400 – ( 12300 – 10400 ) = 8500

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Giving Thanks: Ten Reasons ETFs Are Better Than Mutual Funds | ETF Database

For certain investors in certain circumstances, mutual funds make a lot of sense. But while these vehicles can still be useful in a limited number of scenarios, they are bleeding cash because ETFs are in many ways a better solution that can deliver a number of advantages:

  1. Lower Expenses = Higher Returns
  2. Intraday Trading
  3. Enhanced Precision
  4. Additional Firepower
  5. Tax Efficiencies
  6. Transparency
  7. Commission Free Trading
  8. No Minimums
  9. No Redemption Fees
  10. Money Managers On Demand (At A Fraction Of The Price)

via Giving Thanks: Ten Reasons ETFs Are Better Than Mutual Funds | ETF Database.

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Europe warns of another decline

Dow Jones Europe Index is headed for a test of the band of support between 200 and 205. A 63-day Twiggs Momentum peak below zero would warn of a strong primary down-trend. Failure of primary support would offer a target of 150*.

Dow Jones Europe Index

* Target calculation: 205 – ( 260 – 205 ) = 150

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S&P 500 continues to mimic early 2008

Looking at the S&P 500 weekly chart, it continues to follow the same pattern as in early 2008. There is a similar false recovery above medium-term resistance at 1200 (compared to 1400 in 2008) followed by reversal below the new support level. Also, a similar 63-day Twiggs Momentum peak below the zero line warns of a strong primary down-trend.

S&P 500 Index Weekly Chart

* Target calculation: 1100 – ( 1300 – 1100 ) = 900

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ICI – Trends in Mutual Fund Investing, September 2011

The combined assets of the nation’s mutual funds decreased by $582.3 billion, or 5.0 percent, to $11.040 trillion in September, according to the Investment Company Institute’s official survey of the mutual fund industry.

via ICI – Trends in Mutual Fund Investing, September 2011.

The fall in Stock Funds was far greater, at 9.5%, compared to only 1.3% in Taxable Bond Funds and 0.1% in Taxable Money Market Funds.

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