China’s Shanghai Composite Index is testing resistance at its 2012 high of 2460 on the daily chart. Rising 21-day Twiggs Money Flow indicates medium-term buying pressure. Breakout is likely and would signal a primary up-trend, but the index is overdue for a correction and a higher trough is required to confirm the reversal.
Hong Kong’s Hang Seng index already indicates a primary up-trend. Reversal below 23000, however, would warn of a correction.
India’s Sensex is testing its secondary rising trendline, while declining 13-week Twiggs Money Flow suggests selling pressure. Breach of the trendline would indicate a correction to test 18000/18200.
* Target calculation: 19 + ( 19 – 18 ) = 20
Singapore’s Straits Times Index is testing resistance at 3300. Rising 63-day Twiggs Momentum suggests continuation of the primary up-trend. Breakout would signal an advance to 3900*.
* Target calculation: 3300 + ( 3300 – 2700 ) = 3900
Japan’s Nikkei 225 Index retreated from its 2010 high of 11500. Reversal below 11000 would suggest a correction to 10000. Respect of support would indicate a breakout above 11500 — and a fresh primary advance.
* Target calculation: 11000 + ( 11000 – 8000 ) = 14000
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.