China’s Shanghai Composite Index broke support at 2300, suggesting continuation of the primary down-trend. Failure of primary support at 2150 would confirm the signal, offering a target of 1800*. A 63-day Twiggs Momentum peak below zero indicates continuation of the primary down-trend.
* Target calculation: 2150 – ( 2500 – 2150 ) = 1800
Hong Kong’s Hang Seng Index, however, is correcting to test medium-term support at 20000. Recovery of 63-day Twiggs Momentum above zero indicates a primary up-trend. Respect of the rising trendline would confirm, offering an initial target of 23000*.
* Target calculation: 21500 + ( 21500 – 20000 ) = 23000
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.