Colin Twiggs, Author at the patient investor

November 28, 2012

Euro recovers

The Euro is testing its long-term descending trendline in response to the weakening dollar. Breakout above $1.315/$1.32 would confirm the primary up-trend signaled earlier by 63-day Twiggs Momentum recovery above zero.

Euro/USD

* Target calculation: 1.315 + ( 1.315 – 1.265 ) = 1.365

Colin Twiggs

Colin Twiggs is a former investment banker with almost 40 years of experience in financial markets. He co-founded Incredible Charts and writes the popular Trading Diary and Patient Investor newsletters.

Using a top-down approach, Colin identifies key macro trends in the global economy before evaluating selected opportunities using a combination of fundamental and technical analysis.

Focusing on interest rates and financial market liquidity as primary drivers of the economic cycle, he warned of the 2008/2009 and 2020 bear markets well ahead of actual events.
He founded PVT Capital (AFSL No. 546090) in May 2023, which offers investment strategy and advice to wholesale clients.

November 28, 2012

Aussie Dollar tests $1.05

The Aussie Dollar found short-term support at $1.04 and is testing medium-term resistance at $1.05. Breakout would indicate a test of long-term resistance at $1.06. Oscillation of 63-day Twiggs Momentum above zero suggests a primary up-trend. In the long-term, breakout above $1.06 would offer a target of $1.10* but the RBA is likely to take measures to counter further appreciation.

Aussie Dollar/USD

* Target calculation: 1.06 + ( 1.06 – 1.02 ) = 1.10

Colin Twiggs

Using a top-down approach, Colin identifies key macro trends in the global economy before evaluating selected opportunities using a combination of fundamental and technical analysis.

November 28, 2012

The eurozone’s double-dip recession is entirely self-made. | EUROPP

Good comparison of relative unit labor costs for EZ countries in this article by Paul De Grauwe. Germany is lowest at 85-90. Greece and Portugal highest at 110-115, with Italy, Spain and Belgium next at 105-110. Ireland has made the most spectacular recovery, falling to 95 from a high 115-120 in 2007.

The position of Germany stands out. During 1999-2007, Germany engineered a significant internal devaluation that contributed to its economic recovery and the build-up of external surpluses.

via The eurozone’s double-dip recession is entirely self-made. | EUROPP.

Colin Twiggs

Using a top-down approach, Colin identifies key macro trends in the global economy before evaluating selected opportunities using a combination of fundamental and technical analysis.

November 28, 2012

The Numbers Racket at Steven Landsburg | The Big Questions

Steve Landsberg points out the flaw in the often-quoted statistic that the median US worker has enjoyed hardly any income gain over the past few decades, with median wages growing from $25,000 in 1980 to $25,700 in 2005:

Each demographic group has progressed, but at the same time, there’s been a great influx of lower income groups — women and nonwhites — into the workforce. This creates the illusion that nobody’s progressing when in fact everybody’s progressing.

Actual growth rates are as high as 75% for white women and 62% for nonwhite women.

via The Numbers Racket at Steven Landsburg | The Big Questions: Tackling the Problems of Philosophy with Ideas from Mathematics, Economics, and Physics.

Colin Twiggs

Using a top-down approach, Colin identifies key macro trends in the global economy before evaluating selected opportunities using a combination of fundamental and technical analysis.

November 28, 2012

Australia: ASX 200 resistance

The ASX 200 encountered resistance at the descending trendline — around 4450. A sharp rise in 21-day Twiggs Money Flow indicates short-term buying pressure. Breakout would indicate a primary advance to 4750*. Retreat below 4400 is less likely but would suggest a decline to 4250.

ASX 200 Index

* Target calculation: 4550 + ( 4550 – 4350 ) = 4750

Colin Twiggs

Using a top-down approach, Colin identifies key macro trends in the global economy before evaluating selected opportunities using a combination of fundamental and technical analysis.

November 27, 2012

Asia: India and Japan strengthen

India’s Sensex rallied off support at 18300. Troughs above zero on 13-week Twiggs Money Flow indicate long-term buying pressure. That and the mild correction suggest a strong primary up-trend. Breakout above 19000 would signal an advance to 20000*.

Sensex Index

* Target calculation: 19 + ( 19 – 18 ) = 20

Singapore’s Straits Times Index found support at 2930. Breakout above 3100 would indicate a test of the upper trend channel, while reversal below support would test the lower channel. A 63-day Twiggs Momentum trough above zero would suggest an advance; below zero would reflect a ranging market.

Singapore Straits Times Index

* Target calculation: 3000 + ( 3000 – 2700 ) = 3300

Japan’s Nikkei 225 Index broke resistance at 9200/9300, signaling an advance to 10200*. Expect retracement to first test the new support level. Rising 13-week Twiggs Money Flow — above zero — indicates medium-term buying pressure.

Nikkei 225 Index

* Target calculation: 9200 + ( 9200 – 8200 ) = 10200

South Korea’s Seoul Composite Index is ranging between 1760 and 2060. Expect another test of 2000. Breakout would indicate a primary up-trend, while respect would mean another test of support at 1860. Narrow oscillation of 63-day Twiggs Momentum around zero is typical of a ranging market.

Seoul Composite Index

Colin Twiggs

Using a top-down approach, Colin identifies key macro trends in the global economy before evaluating selected opportunities using a combination of fundamental and technical analysis.

November 27, 2012

China: Shanghai breaks support

China’s Shanghai Composite Index followed the DJ Shanghai Index, breaking primary support at 2000 to warn of a down-swing to 1850*. Completion of another 63-day Twiggs Momentum peak, this time deep below zero, would indicate a strong primary down-trend. Recovery above 2000 is unlikely but would suggest a bear trap.

Shanghai Composite Index

* Target calculation: 2000 – ( 2150 – 2000 ) = 1850

Dow Jones Shanghai Index earlier broke support at 250, signaling a primary decline. 13-Week Twiggs Money Flow below zero warns of selling pressure.

Dow Jones Shanghai Index

* Target calculation: 250 – ( 270 – 250 ) = 230

Hong Kong’s Hang Seng Index is far stronger, testing resistance at 22000. But a sharp fall on 13-week Twiggs Money Flow warns of medium-term selling pressure. Breakout above 22000 would signal an advance to 24000* but reversal below 21000 is as likely and would indicate a test of the rising trendline at 20000.

Hang Seng Index

* Target calculation: 22 + ( 22 – 20 ) = 24

Colin Twiggs

Using a top-down approach, Colin identifies key macro trends in the global economy before evaluating selected opportunities using a combination of fundamental and technical analysis.

November 27, 2012

EconoMonitor » The U.S. is sliding down an investment slope

Thomas Grennes & Andris Strazds highlight the contraction in US private investment since the GFC:

Recent evidence…….suggests that while U.S. GDP growth has surpassed its pre-crisis level, investment has been declining. A comparison with China would not be appropriate due to differences in growth rates and the level of economic development, but even a comparison with the EU-15 is not flattering to the U.S. A look at the Gross Fixed Capital Formation to GDP ratio shows that since the onset of the financial crisis in 2007 the U.S. has been lagging behind the EU-15 countries with respect to investment in long-term assets…….

The chances of China successfully switching from an export-driven economy to internal markets are small. And the US is unlikely to materially lift exports. So their conclusion appears unavoidable.

If insufficient investment results in the U.S. having to adjust by lowering consumption rather than increasing output, the rest of the world will also have to adjust in a way that is reducing growth; namely, produce less.

via EconoMonitor : Thoughts From Across the Atlantic » The U.S. Is Sliding Down an Investment Slope.

Colin Twiggs

Using a top-down approach, Colin identifies key macro trends in the global economy before evaluating selected opportunities using a combination of fundamental and technical analysis.

November 26, 2012

France to ArcelorMittal: if you don’t like losing money, get out of France – Quartz

By Simone Foxman

It’s clear that [Arnaud Montebourg, France’s Minister of Industrial Renewal] is confusing the culprit with the victim. The continued failure of European politicians to resolve the region’s debt and banking problems for good has finally caught up with companies across the euro area. Those firms that waited for a more competitive, more integrated, and more stable monetary union have been forced to cut their losses and change their strategies to survive, as politicians bicker at the bargaining table……

via France to ArcelorMittal: if you don’t like losing money, get out of France – Quartz.

Colin Twiggs

Using a top-down approach, Colin identifies key macro trends in the global economy before evaluating selected opportunities using a combination of fundamental and technical analysis.

November 26, 2012

Mark Carney Named New BOE Governor | WSJ.com

Mark Carney, who currently runs Canada’s central bank, will be the next governor of the Bank of England, the British government announced Monday, in a surprise pick that underscores U.K. officials’ thirst for fresh blood at the powerful institution……

via Mark Carney Named New BOE Governor – WSJ.com.

Colin Twiggs

Using a top-down approach, Colin identifies key macro trends in the global economy before evaluating selected opportunities using a combination of fundamental and technical analysis.