China’s Shanghai Composite Index overcame resistance at 2150/2200 and is headed for a test of 2250. Rising 13-week Twiggs Money Flow indicates medium-term buying pressure. Breakout above 2250 would confirm a primary up-trend. Reversal below 2150 is unlikely at present, but would warn of another test of primary support at 1990/2000. Stimulatory measures by the PBOC may lift China’s economy in the medium-term, but are likely to prove unsustainable in the long-term.
* Target calculation: 2250 + ( 2250 – 2000 ) = 2500
Declining 13-week Twiggs Money Flow on India’s Sensex continues to warn of selling pressure. Breach of support at 25000 would indicate a correction to the primary trendline. A 13-week Twiggs Money Flow trough above zero, however, would suggest another advance. Breakout above 26000 would confirm.
* Target calculation: 21000 + ( 21000 – 15000 ) = 27000
Japan’s Nikkei 225 broke support at 15000, but Monday’s recovery warns of a bear trap. Recovery above 15500 would suggest a rally to 16000*. Reversal below 15000, however, would warn of a test of primary support at 14000. Decline of 13-week Twiggs Money Flow below zero would strengthen the signal.
* Target calculation: 15000 + ( 15000 – 14000 ) = 16000