Mildly bearish sentiment in the US and Europe is causing hesitancy on the ASX 200, while China continues to consolidate above long-term support.
The S&P 500 retreated below resistance at 1700, indicating a test of support at 1675. Longish tails on the last two candles are indicative of buying. Recovery above 1700 would signal continuation of the advance to 1800*. Bearish divergence on 21-day Twiggs Money Flow, however, reflects selling pressure and breach of 1675 is more likely, testing the stronger support level at 1650. Primary support is some way off at 1560.
* Target calculation: 1680 + ( 1680 – 1560 ) = 1800
Recovery of Dow Jones Europe Index above 290 indicates an advance to 310*. Follow-through above 295 strengthens the signal, but divergence on 13-week Twiggs Momentum suggests that a top may be forming. Reversal of TMO below zero would strengthen the warning.
* Target calculation: 290+ ( 290 – 270 ) = 310
China’s Shanghai Index holds steady above long-term support at 1950. Breakout above 2100 would suggest a rally to the downward trendline, but declining 13-week Twiggs Money Flow warns of selling pressure and breach of support at 1950 would offer a target of 1750*.
* Target calculation: 1950 – ( 2150 – 1950 ) = 1750
Australia’s ASX 200 found support at 5000 after falling sharply on Wednesday. Recovery above 5100 would indicate another test of 5250. Oscillation of 21-day Twiggs Money Flow close to zero suggests hesitancy. Breach of 5000 is as likely, and would test the stronger support level of 4850, providing a more robust foundation for further advances.
down 90, up 50, down 40…. reminds me of earlier in the year …. eventually leads to lower prices in the near future, together with various negative divergences comparing todays price to Feb price high leads me to believe the XJO will be testing 4850 during Aug/Sep period, if not lower, though will represent another good buying opportunity.