- DAX and FTSE break support, signaling a down-trend
- China is bullish, but rest of Asia is bearish
- US stocks are correcting, but continue to indicate a bull market
- ASX testing primary support
The quarter-end sell-off has been exacerbated by weakness in Europe.
Germany’s DAX broke primary support at 8900/9000, signaling a (primary) down-trend. Reversal of 13-week Twiggs Money Flow below zero strengthens the bear signal. Target for the decline is 8000*. Recovery above 9000 is unlikely, but would warn of a bear trap.
* Target calculation: 9000 – ( 10000 – 9000 ) = 8000
The Footsie displays similar weakness, breaching primary support at 6400/6500. Target for the decline is 6000*. Recovery above 6500 is unlikely, but would warn of a bear trap.
* Target calculation: 6400 – ( 6800 – 6400 ) = 6000
China’s Shanghai Composite Index is holding above its new support at 2340/2350, but expect retracement to at least 2250 in response to US/European weakness.
Japan’s Nikkei 225 Index broke medium-term support at 15500 and the rising trendline to warn of a correction. Reversal of 13-week Twiggs Money Flow below zero would strengthen the signal. Breach of 14800 would indicate a test of primary support at 14000.
The S&P 500 is testing primary support at 1900. Declining 13-week Twiggs Money Flow warns of selling pressure. Reversal below zero would indicate a down-trend, offering a target of 1800*.
* Target calculation: 1900 – ( 2000 – 1900 ) = 1800
CBOE Volatility Index (VIX) rose to above 20, indicating moderate risk, but nowhere near the levels typical of a bear market.
The ASX 200 broke support at 5250/5300, suggesting a test of long-term support at 5000. Declining 13-week Twiggs Money Flow below zero indicates strong selling pressure. Recovery above 5350 is unlikely, but would suggest that the correction is over.
* Target calculation: 5350 – ( 5700 – 5350 ) = 5000