Germany’s DAX is testing resistance at 7500 but bearish divergence on 13-week Twiggs Money Flow warns of medium-term selling pressure. Breakout would signal an advance to 8000*, while respect of 7500 would indicate another test of primary support at 7000. Reversal below 7000 is unlikely but would warn that a top is forming.
* Target calculation: 7500+ ( 7500 – 7000 ) = 8000
Dow Jones Europe Index is similarly testing resistance at 265. Again, bearish divergence on 13-week Twiggs Money Flow warns of medium-term selling pressure. Breakout above 265 would offer a target of 285*. Reversal below 245 is unlikely but would indicate a decline to 210.
* Target calculation: 265 + ( 265 – 245 ) = 285
The FTSE 100 is in a similar position: headed for a test of 6000. Breakout would signal an advance to 6400*. But bearish divergence on 13-week Twiggs Money Flow warns of medium-term selling pressure. Reversal below 5600 would test support at 5250.
* Target calculation: 6000 + ( 6000 – 5600 ) = 6400
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.