ColinTwiggs, Author at the patient investor

March 15, 2012

Crude Oil & Commodities

Brent crude broke through resistance at $125/barrel on the Monthly chart, despite the strengthening dollar. Target for the advance is the 2008 high of $145.

ICE Brent Afternoon Markers

* Target calculation: 125 + (125 – 100 ) = 150

The broader CRB Commodities Index lags far behind. Breakout above 325 would signal an advance to 370*. But 63-day Twiggs Momentum remains below zero, indicating a primary down-trend, and reversal below the rising trendline would strengthen the signal. Failure of primary support at 290 would confirm.

CRB Commodities Index

* Target calculation: 330 + ( 330 – 290 ) = 370

March 14, 2012

Gold falls as the Dollar rises

The US Dollar Index broke resistance at 80 on the Weekly chart, signaling an advance to 82. The Index is already in a primary up-trend, as indicated by 63-day Twiggs Momentum above zero. Breakout above 82 would offer a target of 86*.

US Dollar Index

* Target calculation: 82 + ( 82 – 78 ) = 86

Spot Gold followed through below last week’s low, indicating a correction to test primary support at 1500. Respect of the long-term rising trendline would indicate the primary up-trend is intact, but reversal of 63-day Twiggs Momentum below zero for a second time warns of a down-trend. Target for a down-trend would be 1200 to 1400*.

Spot Gold

* Target calculation: 1600 – ( 1800 – 1600 ) = 1400

The Hourly chart shows short-term support at 1635 and resistance at 1650. Failure of support would test 1600, while upward breakout from the trend channel would signal retracement to test the new resistance level.
Spot Gold

March 14, 2012

Treasury yields surge

The yield on 10-year US Treasury Notes has surged to test resistance at 2.40 percent. Breakout would indicate a rally to the long-term trendline at 3.00 percent on the Monthly chart. Rising treasury yields signal that investors are migrating out of bonds and into stocks, especially when the Fed is attempting to suppress long-term rates.

10-Year Treasury Yields

March 14, 2012

Japan, India, South Korea

Japan’s Nikkei 225 Index is testing resistance at 10,000. Rising 13-week Twiggs Money Flow indicates strong buying pressure. Expect a short retracement followed by an advance to 11,000*.

Nikkei 225 Index

* Target calculation: 10000 + ( 10000 – 9000 ) = 11000

India’s Sensex Index is testing resistance at 18,000 after respecting support at 17,000. Rising 13-week Twiggs Money Flow indicates strong buying pressure. Upward breakout would signal an advance to 20,000*.

BSE Sensex Index

* Target calculation: 18500 + ( 18500 – 17000 ) = 20000

South Korea’s Seoul Composite Index is similarly testing resistance, at 2050. Breakout would signal an advance to 2200. Respect of the zero line by 13-week Twiggs Money Flow indicates long-term buying pressure, suggesting out-performance.

Seoul Composite Index

* Target calculation: 2050 + ( 2050 – 1950 ) = 2150

March 14, 2012

S&P 500 and Nasdaq

An Hourly chart shows the S&P 500 Index consolidating below 1400. Breakout above the narrow flag would signal an advance to 1450*. Reversal below the trend channel is unlikely but would warn of retracement to 1340.

S&P 500 Index

* Target calculation: 1300 + ( 1300 – 1150 ) = 1450

The Nasdaq 100 exceeded its initial target of 2650, now revised to 2750, and is due for a correction. Bearish divergence on 21-day Twiggs Money Flow indicates medium-term selling pressure. Expect a test of support at 2400.

Nasdaq 100 Index

* Target calculation: 2400 + ( 2400 – 2050 ) = 2750

March 14, 2012

Hong Kong & Shanghai

Hong Kong’s Hang Seng Index retreated Wednesday in response to a sharp fall in Shanghai. Bearish divergence on 21-day Twiggs Money Flow warns of a correction, but as long as the lower trend channel at 20,000 is respected the primary up-trend remains intact.

Hang Seng Index

* Target calculation: 20000 + ( 20000 – 17500 ) = 22500

Dow Jones Shanghai Index fell sharply to test support at 295. Failure of support would warn of a correction.

Dow Jones Shanghai Index

Shanghai Composite Index shows a similar fall. Follow-through below 2380 would signal a correction to primary support at 2150.

Shanghai Composite Index

March 14, 2012

Citigroup Vows to Try Again as Some Lenders Fail Fed Test – Bloomberg

Citigroup (C), SunTrust (STI), MetLife (MET) and Ally Financial failed to get their capital plans approved in the Fed’s stress tests, which mandated a minimum tier 1 capital ratio of 5%. Citi had a projected 4.9% ratio under the tests, SunTrust a 4.8% ratio, and Ally a mere 2.5% ratio.

The Fed is testing to see how the capital of U.S. banks might hold up through a deep recession and a second housing crisis. The scrutiny focused on variables such as trading and counterparty losses and write-offs on credit cards and first-lien mortgages. Most of the 19 banks passed.

via Citigroup Vows to Try Again as Some Lenders Fail Fed Test – Bloomberg.

March 14, 2012

Singapore: Straits Times Index

Singapore’s Straits Times Index gapped above resistance at 3000 today, confirming the primary up-trend, and is currently trading near 3020. Target for the initial advance is 3200*.

Singapore Straits Times Index

* Target calculation: 2900 + ( 2900 – 2600 ) = 3200

March 13, 2012

Canada TSX: Momentum trades

Bullish

New Zealand Energy [NZ] ~ respected support at $3.00; breakout above $3.80 would confirm another primary advance.
Rio Alto Mining [RIO] ~ narrow consolidation favors breakout above $4.70, signaling a new advance; support at $4.30.
Roxgold [ROG] ~ good support at $1.90, breakout above $2.15 would signal a new advance.

Watch for breakout

Tri-Oil Resources A [TOL] ~ narrow consolidation between $3.50 and $3.80 but strong bearish divergence on 21-day Twiggs Money Flow
Argonaut Gold [AR] ~ strong resistance at $10.00, support at $9.00
Atna Resources [ATN] ~ support at $1.25, resistance at $1.50.
Northern Graphite [NGC] ~ 21-day Twiggs Money Flow below zero is bearish but ascending triangle below $2.20, breakout would signal a fresh advance.
Pretium Resources [PVG] ~ breakout above $18.00 would signal continuation
TAG Oil [TAO] ~ testing resistance at $10.00
Americas Petrogas [BOE] ~ testing support at $4.00, respect would favor breakout above $4.50 and a fresh advance.

Americas Petrogas [BOE]

Coastal Energy [CEN] ~ recovered above $20.00, follow-through above $21.00 would confirm a fresh advance.

Americas Petrogas [BOE]

Negative Watch

Silvercrest Mines [SVL] ~ strong bearish divergence on 21-day Twiggs Money Flow followed by sharp drop to test support at $2.50.
Madalena Ventures [MVN] ~ long correction, headed for test of $1.00.

March 12, 2012

Carmen Reinhart: Financial Repression – WSJ

Carmen Reinhart marks the rise of financial repression. “Faced with a private and public domestic debt overhang of historic proportions, policy makers will be preoccupied with debt reduction, debt management, and, in general, efforts to keep debt-servicing costs manageable. In this setting, financial repression in its many guises with its dual aims of keeping interest rates low and creating or maintaining captive domestic audiences will probably find renewed favor and will likely be with us for a long time.”

via Secondary Sources: Financial Repression, Jobs and Growth, Daylight Saving Scam – Real Time Economics – WSJ.