Stocks are recovering from their recent soft patch and breakout above resistance is likely, signaling further gains.
North American Stocks
The S&P 500 is testing medium-term resistance at 2120. Breakout would signal an advance to 2200*. Three weekly candles with long tails reflect medium-term buying pressure, while a 13-week Twiggs Money Flow trough high above zero indicates long-term pressure. Retracement that respects the new support level at 2100 would further strengthen the bull signal.
* Target calculation: 2120 + ( 2120 – 2040 ) = 2200
CBOE Volatility Index (VIX) at 12 indicates low risk typical of a bull market.
Dow Jones Industrial Average is testing resistance at 18300. Buying pressure appears similar to the S&P 500 and breakout would offer a target of 19000*.
* Target calculation: 18300 + ( 18300 – 17600 ) = 19000
Canada’s TSX 60 found support at 870. 13-Week Twiggs Momentum holding above zero continues to indicate a primary up-trend. Breakout above 900 would offer a long-term target of 1000*.
* Target calculation: 900 + ( 900 – 800 ) = 1000
Europe
Germany’s DAX encountered support above 11000. Penetration of the descending trendline would indicate the correction is over and follow-through above 12000 would suggest a primary advance. Declining 13-week Twiggs Money Flow warns of continued selling pressure and a further test of 11000, but respect of support remains likely and would provide a solid base for further advances.
The Footsie also displays long tails, suggesting medium-term buying support, but declining 13-week Twiggs Money Flow indicates continued selling pressure. Breach of 6900 would warn of a correction to 6700, but further losses are unlikely at present. Recovery above 7100 would confirm the long-term breakout, offering a target of 8000*.
* Target calculation: 7000 + ( 7000 – 6000 ) = 8000
Asia
The Shanghai Composite is consolidating between 4000 and 4500. Breach of either of these levels would signal future direction. Declining 13-week Twiggs Money Flow warns of medium-term selling pressure, favoring the downside.
* Target calculation: 3500 + ( 3500 – 2500 ) = 4500
Short retracement on Japan’s Nikkei 225 Index is a bullish sign. Breakout above 20000 would offer a target of 22000*. Declining 13-week Twiggs Money Flow reflects medium-term selling pressure; recovery above the descending trendline would be a bullish sign.
* Target calculation: 20000 + ( 20000 – 18000 ) = 22000
India’s Sensex found support between 26500 and 27000. Long tails suggest medium-term buying pressure. Recovery above 28000 and the descending trendline would suggest another attempt at 30000. But 13-week Twiggs Money Flow remains below zero, warning of (long-term) selling pressure. Another peak below zero would warn of breach of primary support and a reversal.
Australia
ASX 200 support at 5750, 5650 or 5550: which is most relevant? Judging by some of the questions received, I succeeded in confusing a number of readers. Here is a brief summary:
- 5750 acted as medium-term support until the beginning of May, when breach of 5750 and the rising trendline warned of a correction.
- 5750 transformed into medium-term resistance and penetration would suggest the correction is over.
- There is a strong band of support between the two recent (2014) highs of 5650 and 5550.
- Breach of this band (i.e. below 5550) would indicate a test of primary support at 5120.
- Respect (i.e. 5550 intact) would provide a solid base for a rally and a further (primary) advance if resistance at 6000 is broken.
Mild decline of 13-week Twiggs Money Flow suggests medium-term selling pressure — not a reversal. Recovery above 5750 remains more likely than breach of 5550.
* Target calculation: 6000 + ( 6000 – 5750 ) = 6250
More….
Gold: Ichimoku Cloud
Benjamin Disraeli: Success
China: Cement Production
US GDP: Where is it headed?
Peter Drucker: Last deadly sin
B.B. King: The Thrill Is Gone
B.B. King: Lucille
I think I’ve done the best I could have done. But I keep wanting to play better, go further. There are so many sounds I still want to make, so many things I haven’t yet done. When I was younger I thought maybe I’d reached that peak. But I’m 86 now, and if I make it through to next month, I’ll be 87. And now I know it can never be perfect, it can never be exactly what it should be, so you got to keep going further, getting better.
~ Riley (B.B.) King