Upward breakout from the recent flag formation on the FTSE 100 would signal an advance to the December 1999 high of 6950/7000*. Rising 13-week Twiggs Money Flow suggests medium-term buying pressure, but the specter of a long-term bearish divergence remains. Expect strong resistance at 7000. Reversal below 6600 is unlikely, but would warn of a correction to primary support and the rising trendline at 6400.
* Target calculation: 6700 + ( 6700 – 6400 ) = 7000
Narrow consolidation on Dow Jones Euro Stoxx 50 above support at 3000 is also a bullish sign. Rising 13-week Twiggs Momentum suggests a primary up-trend. Breakout above 3100 would confirm an advance to 3500*. Reversal below 3000 is unlikely, but would warn of a correction to the rising trendline.
* Target calculation: 3000 + ( 3000 – 2500 ) = 3500
Germany’s DAX is heading towards its target of 9500*, with steeply rising 13-week Twiggs Money Flow signaling strong medium-term buying pressure. Breach of the latest trendline is not likely, would indicate a correction to support at 8500.
* Target calculation: 8500 + ( 8500 – 7500 ) = 9500