Dow Jones Japan index chose to ignore the poker game on Capitol Hill in Washington today, following Friday’s sharp fall. Breach of the rising trendline, however, warns of a correction.
A weekly chart of the Nikkei 225 shows short-term support at 14300, with resistance at 15000. Failure of support would test the primary level at 13200, while upward breakout remains as likely and would signal an advance to 17000*. Earlier bearish divergence on 13-week Twiggs Money Flow warns of a reversal; decline below 15% would strengthen the signal. Failure of support at 13200 would confirm.
* Target calculation: 15000 + ( 15000 – 13000 ) = 17000
China’s Shanghai Composite is testing short-term support at 2150. Failure of support would penetrate the rising trendline, warning of another correction. A sharp fall on 13-week Twiggs Money Flow indicates short-term selling pressure. Respect of 2150, or even 2100, would signal another test of resistance at 2250. Follow-through above the descending trendline would suggest the primary down-trend is reversing. But breach of 2100 would indicate another test of primary support at 1950.
India’s Sensex continues on a downward path toward primary support. Penetration of the former rising trendline would increase the likelihood of a test. Breakout below 18500 would signal a primary down-trend, while follow-through below 18000 would confirm. A 13-week Twiggs Money Flow trough above zero is unlikely, but would suggest continuation of the primary up-trend.
* Target calculation: 18500 – ( 20500 – 18500 ) = 16500
The ASX 200 retreated below its May high of 5250 for a second time; a bearish sign. Penetration of the rising trendline also warns of a correction. Breach of short-term support at 5200 would confirm.
There appears little danger of a primary reversal at this stage, with primary support at 4650, but 13-week Twiggs Momentum below zero would strengthen the warning. 13-Week Twiggs Money Flow (not shown) also displays a bearish divergence, indicating selling pressure. Long-term target for an advance would be 5850*, but we are likely to see a correction first.
* Target calculation: 5250 + ( 5250 – 4650 ) = 5850