The monthly chart of the Madrid General Index is testing its 2009 low of 700. With unemployment rates (24.4 per cent) similar to the US Great Depression and more than half of Spaniards under 25 jobless, there is no recovery in sight. 63-Day Twiggs Momentum oscillating below zero indicates a strong primary down-trend. Failure of support at 700 would signal another primary decline.
* Target calculation: 750 – ( 900 – 750 ) = 600
Italy’s MIB Index is more resilient, with recovery of 13-week Twiggs Money Flow above zero indicating buying pressure. Expect another test of resistance at 17000.
The CAC-40 monthly chart shows France in a similar fix. Failure of support at 3100 would indicate another test of primary support, close to the 2009 low of 2500. Recovery above 3600, however, would indicate another test of 4000 — especially if accompanied by recovery of 63-day Twiggs Momentum above 10%.
The German DAX respected support at 6500, confirming the primary up-trend. Rising 13-week Twiggs Money Flow indicates strong buying pressure. Expect another test of 7500.
The FTSE 100 respected support at 5600 and breakout above 5800 would signal an advance to 6400*. The 13-week Twiggs Money Flow trough above the zero line indicates buying pressure. Reversal below 5600 is unlikely but would warn that the primary up-trend is weakening.
* Target calculation: 6000 + ( 6000 – 5600 ) = 6400