Barry Ritholz interviews Paul Desmond, chief strategist and president of Lowry’s Research:
According to Lowry’s, “the weight of evidence continues to suggest a healthy primary uptrend with no end in sight.”
….. based on the data Desmond follows, he makes a fairly convincing case that this bull market still has a ways to go before it tops out.
Read more at How Market Tops Get Made – Bloomberg View.
The Financial Times quotes Igor Yurgens, a former Kremlin adviser:
He added that capital flight was likely to soar. He said his bank had received “a huge number of calls” into his bank’s Swiss offices from Russian clients over the past two weeks and a number of wire transfers into Swiss bank accounts out of Russia. Clients, he said, would prefer to keep money outside the country despite the risk of asset freezes.
Read more at Sanctions nerves ripple through Moscow – FT.com.
Canada’s TSX 60 is testing resistance at the 2011 high of 820. Rising troughs above zero on 13-week Twiggs Money Flow signal buying pressure. Breakout above 820 would signal an advance to 840*. Expect support at 800 and the rising trendline.
* Target calculation: 805 + ( 805 – 770 ) = 840
TSX 60 VIX below 15 indicates low risk typical of a bull market.
The Nikkei 225 recovered above 15000, signaling another attempt at 16000. Retracement that respects the new support level would strengthen the signal. Completion of a 13-week Twiggs Money Flow trough above zero would indicate buying pressure, but bearish divergence flags long-term selling pressure and reversal below zero would warn of a primary down-trend — confirmed if support at 14000 is breached.
* Target calculation: 16000 + ( 16000 – 14000 ) = 18000
China’s Shanghai Composite Index is testing primary support at 2000. Breach would warn of a decline to 1850*. Follow-through below 1990 would confirm. Reversal of 21-day Twiggs Money Flow below zero would also warn of a primary down-trend. Recovery above 2080 is unlikely, but would indicate another test of 2150.
* Target calculation: 2000 – ( 2150 – 2000 ) = 1850
India’s Sensex broke through 21500, signaling an advance to 23000*. A trough above zero on 13-week Twiggs Money Flow indicates buying pressure. Retracement that respects the new support level would strengthen the signal. Reversal below 21000 is unlikely, but would warn of another correction.
* Target calculation: 21500 + ( 21500 – 20000 ) = 23000
….I had been bullish from the very start of a bull market, and I had backed my opinion by buying stocks. An advance followed, as I had clearly foreseen. So far, all very well. But what else did I do? Why, I listened to the elder statesmen and curbed my youthful impetuousness. I made up my mind to be wise carefully, conservatively. Everybody knew that the way to do that was to take profits and buy back your stocks on reactions. And that is precisely what I did, or rather what I tried to do; for I often took profits and waited for a reaction that never came. And I saw my stock go kiting up ten points more and I sitting there with my four-point profit safe in my conservative pocket. They say you never go broke taking profits. No, you don’t. But neither do you grow rich taking a four-point profit in a bull market.
~ Jesse Livermore
The Euro broke through resistance at $1.38, signaling an advance to $1.43*. Retracement that respects the new support level would strengthen the signal. Bearish divergence on 13-week Twiggs Momentum continues to warn of medium-term weakness, however, and reversal below $1.38 would suggest another correction.
* Target calculation: 1.38 + ( 1.38 – 1.33 ) = 1.43
Germany’s DAX retreated below 9500 to warn of another correction. Bearish divergence on 13-week Twiggs Money Flow indicates medium-term selling pressure. Respect of primary support at 9000 — and the rising trendline — would confirm a healthy up-trend. Breach of support is unlikely, but would signal reversal to a down-trend.
DAX Volatility at 20 reflects moderate risk.
The Footsie retreated to support at 6690/6700 on the daily chart. Breach would indicate another test of primary support at 6400. The primary trend is upward and a 21-day Twiggs Money Flow trough above zero would reflect medium-term buying pressure.
* Target calculation: 6800 + ( 6800 – 6400 ) = 7200
The Dow Jones-UBS Commodity Index is retracing to test its new support level at 134. Respect would confirm the primary up-trend, signaled by the earlier breakout and recovery of 13-week Twiggs Momentum above zero. But a falling Shanghai Composite Index warns of weakening demand. Reversal below 134 would suggest a bull trap.
* Target calculation: 128 + ( 128 – 122 ) = 134
The Aussie Dollar retreated from resistance at $0.91 and is likely to test medium-term support at $0.89. Breach of support would test the primary level at $0.87, while respect would favor another attempt at $0.91. The primary trend is down and failure of primary support would offer a target of $0.83*.
* Target calculation: 0.87 – ( 0.91 – 0.87 ) = 0.83
The ASX 200 followed the Aussie lower, retreating below 5450 on the daily chart. Retreat of 21-day Twiggs Money Flow below zero would complete a bearish divergence, warning of a correction. Failure of support at 5350 would confirm. The primary trend remains upward and only breach of support at 5050 would signal a reversal.
* Target calculation: 5400 + ( 5400 – 5000 ) = 5800
ASX 200 VIX below 15 continues to indicate low risk typical of a bull market.
