Japan’s Nikkei 225 index also shows a bearish divergence on 21-day Twiggs Money Flow, warning of a correction. The next medium-term support level below 10000 is the former resistance level at 9000, so there could be a fairly sharp fall. But the primary trend is up and recovery above 10200 would signal an advance to 11000*.
* Target calculation: 10 + ( 10 – 9 ) = 11
Despite global weakness, South Korea’s Seoul Composite Index continues to test resistance at 2050. Bearish divergence on 21-day Twiggs Money Flow, however, warns of medium-term selling pressure. Expect another test of 1950, but recovery above 2050 would signal an advance to 2250*.
* Target calculation: 1950 + ( 1950 – 1650 ) = 2250
Colin Twiggs is a former investment banker with almost 40 years of experience in financial markets. He founded PVT Capital (AFSL number 546090), which provides income and growth strategies to wholesale clients.
Colin also co-founded Incredible Charts and writes the popular Patient Investor newsletter.
Using a top-down approach, Colin identifies macro trends in the global economy and then combines fundamental and technical analysis to evaluate opportunities in sectors that stand to benefit.
Focusing on interest rates and financial market liquidity as primary drivers of the economic cycle, he warned of the 2008/2009 and 2020 bear markets well ahead of actual events.