Colin Twiggs, Author at the patient investor

September 18, 2012

Europe strengthening

The FTSE 100 is headed for a test of primary resistance at 6000/6100. Rising 13-week Twiggs Money Flow indicates buying pressure. Expect strong selling at resistance, because of the number of previous peaks at this level, but breakout would offer a long-term target of 6750*.

FTSE 100 Index

* Target calculation: 6000 + ( 6000 – 5250 ) = 6750

Europe is recovering strongly, with Dow Jones Europe Index testing primary resistance at 260/265. Rising 13-week Twiggs Money Flow indicates buying pressure. Breakout above 265 would signal an advance to 310*.

Dow Jones Europe Index

* Target calculation: 260 + ( 260 – 210 ) = 310

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.

September 18, 2012

Canada: TSX60 wedge

The TSX 60 is headed for the upper channel of its broadening wedge at 725 on the daily chart. Bearish divergence on 21-day Twiggs Money Flow warns of medium-term selling pressure. Retreat below 700 would warn of a swing to the lower wedge border.

TSX 60 Index

* Target calculation: 700 + ( 700 – 640 ) = 760

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.

September 18, 2012

S&P 500 hesitates

The S&P 500 hesitated at its upper trend channel. Follow-through below 1460 would indicate a test of the lower channel and support at 1400. Bearish divergence on 21-day Twiggs Money Flow continues to warn of a correction.

S&P 500 Index

* Target calculation: 1420 + ( 1420 – 1280 ) = 1560

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.

September 17, 2012

EU Commission Considering Splitting Up Banks to Avoid Future Bailouts – SPIEGEL ONLINE

By Martin Hesse and Christoph Pauly

EU Commissioner Michel Barnier has asked experts to examine the possibility of splitting up major European banks to avoid future bailouts at taxpayers’ expense. But even less radical intervention in the banking sector could have drastic consequences for the industry, and its powerful lobby is resisting any such change……

[Daniel Zimmer, head of the German Monopolies Commission] notes that Germany has already taken steps in the right direction. Under the new German restructuring law, when a bank is in trouble the most critical parts of the institution can be transferred to a bridge bank, allowing the remainder to be liquidated. In such cases, the shareholders and most of the bank’s creditors would not be compensated. A fund made up of contributions from banks would cover restructuring costs.

But there is a problem with the new system. “In a worst-case scenario, a bank has to be split up into vital and other parts within a single weekend,” says Zimmer. “This is only possible if there is already a clear separation between the two parts beforehand.” This is why Zimmer believes it makes sense to establish the dividing line in advance, in a manner similar to what Britain’s Vickers Commission envisions.

via EU Commission Considering Splitting Up Banks to Avoid Future Bailouts – SPIEGEL ONLINE.

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.

September 17, 2012

Earnings Outlook in U.S. Dims as Global Economy Slows – NYTimes.com

By NELSON D. SCHWARTZ

The boom in American corporate profits, which has far outpaced the gains in the broader economy since the end of the last recession, is faltering.

Giants like FedEx and Intel, two bellwethers of the global economy, are warning of lower quarterly profits because of weakness in worldwide demand. Overseas companies are feeling the pinch, too. Burberry, the British luxury retailer which had seemed immune to a slowdown, is offering a similar warning.

via Earnings Outlook in U.S. Dims as Global Economy Slows – NYTimes.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.

September 17, 2012

2008 Financial Crisis Cost Americans $12.8 Trillion: BetterMarkets

Better Markets, a pro-financial reform Wall Street watchdog, estimates the total loss of American wealth since Sept. 15, 2008, when Lehman filed for bankruptcy, as $12.8 Trillion dollars — almost one year’s GDP. Better Markets president & CEO Dennis Kelleher calls for effective regulation of systemically important Wall Street firms to prevent a recurrence of the GFC.

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Better Markets: Cost of the Crisis (PDF)

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.

September 14, 2012

Forex: Euro, Pound Sterling, Canadian Loonie, Australian Dollar and Japanese Yen

The Euro broke out above its trend channel and resistance at $1.2750 on the daily chart to signal a primary up-trend. Recovery of 63-day Twiggs Momentum above zero confirms. Target for the advance is the 2012 high of $1.35*.

Euro/USD

* Target calculation: 1.275 + ( 1.275 – 1.20 ) = 1.35

Pound Sterling is correcting to support around €1.22 against the Euro. Breach of the rising trendline would warn that a top is forming, while retreat of 63-day Twiggs Momentum below zero would indicate a primary down-trend.

Pound Sterling/Euro

Canada’s Loonie is retracing to test the new support level after breaking above resistance against the greenback at $1.02. Breakout confirms the primary up-trend indicated by long-term bullish divergence on 63-day Twiggs Momentum. Target for the advance is $1.08*.

Canadian Loonie/Aussie Dollar

* Target calculation: 1.02 +( 1.02 – 0.96 ) = 1.08

The Aussie Dollar is testing resistance at $1.06 against the greenback. The 63-day Twiggs Momentum trough above zero signals a primary up-trend. Breakout above $1.06 would confirm. Expect resistance at $1.075/$1.08, but target for an advance would be $1.10*.

Aussie Dollar/USD

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

I commented a few days ago that apart from a bad case of Dutch Disease — where capital inflows and increased revenues from resources projects drive up the exchange rate and harm other export industries — the Australian dollar is at risk of developing “Swiss Disease” — where flight to a safe haven currency also drives up the exchange rate, destroying local export industries. Professor Warwick McKibbin has a point:

“When a portfolio shift into Australian currency is observed, the exchange rate change should be completely offset so the shock only affects the money markets rather than the real economy. If the shock cannot be observed precisely then the central bank should “lean against the wind”, that is intervene to slow down the extent of appreciation of the exchange rate.”

The RBA should be selling dollars to protect local export industries from rapid appreciation of the currency.

The Aussie Dollar is headed for resistance at ¥83.50 against the Japanese Yen. Recovery of 63-Day Twiggs Momentum above zero indicates a primary up-trend. Breakout would signal an advance to ¥88*.

Aussie Dollar/Japanese Yen

* Target calculation: 84 + ( 84 – 80 ) = 88

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.

September 14, 2012

NYSE to Pay $5 Million Penalty to SEC – WSJ.com

By CHAD BRAY

NYSE Euronext NYX +2.23% agreed to pay a $5 million penalty to settle allegations by the Securities and Exchange Commission that technology issues at the New York Stock Exchange gave some customers an “improper head start” on trading information. The case marks the first time the SEC has ever brought a case that resulted in a monetary penalty against an exchange.

via NYSE to Pay $5 Million Penalty to SEC – 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.

September 14, 2012

Korea's answer to Michael Jackson

See if you can spot Kim Jong-il in the video 😉

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.

September 14, 2012

Tony Robbins | The National Debt and Federal Budget Deficit Deconstructed

The $15 trillion U.S. national debt — how big is it really? And what can we do about the enormous federal budget deficit?

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.