- US stocks continue their bull-trend
- European stocks strengthen
- China likewise
- ASX retraces to test support
The S&P 500 is testing the upper border of a broadening wedge formation. Retracement that respects support at 2000 would enhance the bull signal and offer a target of 2280*. Rising 13-week Twiggs Money Flow indicates buyers are in control. Reversal below 2000 and the rising trendline is unlikely, but would signal another correction.
* Target calculation: 2040 + ( 2040 – 1820 ) = 2280
Dow Jones Industrial Average has already broken above a similar broadening wedge formation, offering a long-term target of 19000*.
* Target calculation: 17500 + ( 17500 – 16000 ) = 19000
CBOE Volatility Index (VIX) continues to reflect low risk typical of a bull market.
Germany’s DAX is testing resistance at 9400/9500, but 13-week Twiggs Money Flow remains weak. Reversal of TMF below zero would warn of another correction. Reversal below 9000 would confirm a primary down-trend. Follow-through above 9500 is less likely, but would suggest another test of 10000.
* Target calculation: 9000 – ( 10000 – 9000 ) = 8000
The Footsie proved more robust, breaking resistance, at 6500/6560 to signal a test of 6900. 13-Week Twiggs Money Flow is rising strongly, signaling buyers are in control.
China’s Shanghai Composite Index broke resistance at its 2013 high of 2440, signaling an advance. 13-Week Twiggs Money Flow reversal below its rising trendline, however, would warn of (medium-term) selling pressure.
* Target calculation: 2400 + ( 2400 – 2300 ) = 2500
The ASX 200 retraced to test support at 5440/5450. Respect would signal another test of the August high at 5650/5660. Failure of support would indicate a test of 5250/5300 and a weaker up-trend. Reversal below 5250 remains unlikely, but would warn of another test of primary support. A 21-day Twiggs Money Flow trough above zero would signal long-term buying pressure.
* Target calculation: 5650 + ( 5650 – 5300 ) = 6000