The ASX is feeling the effect of slowing manufacturing in China, with falling iron ore prices causing weakness in RIO, FMG and BHP. Rio Tinto is testing support at $50, while steeply falling 13-week Twiggs Money Flow warns of strong selling pressure.
Impact on the ASX 200 index is more diluted but 13-week Twiggs Money Flow below zero again warns of selling pressure. Breakout above 4400 is unlikely in the present climate.
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.