The Hang Seng index is falling steeply, with 13-week Twiggs Money Flow below zero warning of selling pressure. Target for the current-down-swing is 16000*.
* Target calculation: 19 – ( 22 – 19 ) = 16
The Shanghai Exchange is closed for Chung Yeung Festival, but the Shanghai Composite Index was testing support at 2350 on Friday. Failure of support would offer a long-term target of 1800*.
* Target calculation: 2400 – ( 3000 – 2400 ) = 1800
Hello there Colin,
Regarding the Dow’s large(ish) down move yesterday I’m surprised that you are able to say that….
‘An up-tick in volume indicates some buying support but this appears insufficient to withstand downward pressure’.
Personally, I’m never sure whether the uptick is due to support (people trading the wedge/channel) OR people getting out because they expect more nasty downs the next day(s).!! I usually play it safe and assume the latter….. :(…or is it 🙂
Kind regards, and thank you for your, always, interesting views.
Frank
There were two consecutive red candles of roughly the same height, but the second had higher volume. What drives up volume in those circumstances is resistance to the trend direction.
If someone is buying … then someone else is selling. I see it as someone ( a group) attempting to form support (or short covering against possible “good” news) but sellers using it as an opportunity to offload at a perceived “good” price … ie better here than lower … just in case.
Plus I think this “greek” thing is being overplayed. The asian action is more suggestive of lurking problems in asia … someone “knows” something and maybe its not as good as its being touted to be. Then the real problems start because asia is everyones saviour … aren’t they?
The mining companies think so … so do the goverments … especially ours. Now all of a sudden our RBA needs an office there! Oh ohh …
Oh … one more thing … a question actually.
If China is supposed to be so good … why is their money exiting their country … into $US?
Actually where is all the money going …. and whose is it … and why …?
Just curious
China has $1.3 T invested in US Treasuries. For a poor country (GDP per capita of $4000) that is a fair wack. With Treasuries yielding no more than 2% and the dollar weakening, there can only be one explanation: inflows on the US capital account help to peg the yuan at an artificial low against the greenback. Japan did the same for years, investing $0.9 T in Treasuries to suppress the yen.