“Bob Carr. Australian Foreign Minister.” Originally aired on ABC TV’s 7.30: 03/05/2012:
Clarke and Dawe – Australian Political Scientist
An irreverent look at Australian politics.
Bair: Regulators Should Tighten Volcker Rule – WSJ.com
Jamila Trindle: Regulators should push derivatives out of federally backed banks and tighten the Volcker rule, former Federal Deposit Insurance Corp. Chairman Sheila Bair said Thursday.
“Don’t let insured deposits fund that activity,” Ms. Bair said at a roundtable on the Volcker rule held by staff of the Commodity Futures Trading Commission.
Forex: Australia and Canada
Falling crude oil and commodity prices are likely to depress resource-rich currencies. Canada’s Loonie found support at $0.97 but 63-Day Twiggs Momentum below zero warns of a primary down-trend. Failure of $0.97 is likely and would test the primary level at $0.94/0.95.
* Target calculation: 0.95 – ( 1.01 – 0.95 ) = 0.89
The Aussie Dollar is testing primary support at $0.96/0.97. Declining 63-day Twiggs Momentum (below zero) warns of a primary down-trend. Failure of support at $0.96 would offer a long-term target of $0.84*.
* Target calculation: 0.96 – ( 1.08 – 0.96 ) = 0.84
Forex: UK and Europe
The Euro broke primary support at $1.26 against the greenback. A peak below zero on 63-day Twiggs Momentum indicates continuation of the primary down-trend. Expect a test of the 2010 low at $1.19/$1.20.
* Target calculation: 1.26 – ( 1.35 – 1.26 ) = 1.17
Pound Sterling is consolidating between €1.2350 and €1.2600 against the euro. Reversal below the lower trend channel would warn of a correction, while breakout above €1.2600 would signal continuation of the primary advance. Completion of a bearish divergence on 63-Day Twiggs Momentum would strengthen a bear signal.
Commodities lead stocks lower
The CRB Commodities index is headed for a test of the 2010 low of 250. A 63-day Twiggs Momentum peak below zero warns of a strong primary down-trend. Divergence from the S&P 500 index warns that stocks are likely to fall, following commodities down — at least to their 2011 lows.
* Target calculation: 290 – ( 330 – 290 ) = 250
Crude: Brent and WTI Light
Brent Crude is headed for a test of primary support at $100/barrel. Failure would indicate a long-term decline to $75/barrel*. 63-Day Twiggs Momentum below zero already warns of a primary down-trend.
* Target calculation: 100 – ( 125 – 100 ) = 75
Nymex WTI Crude below $90/barrel, signals a primary down-trend. 63-Day Twiggs Momentum below zero strengthens the signal. Expect a test of the 2011 low at $75/barrel — similar to Brent Crude.
* Target calculation: 92 – ( 110 – 92 ) = 76
Spot gold tests $1530
The Dollar Index followed through after last week’s breakout above resistance at 81.50/82.00, confirming the fresh advance signaled by a 63-day Twiggs Momentum trough above zero. Target for the advance is 86.00*.
* Target calculation: 82 + ( 82 – 78 ) = 86
On the daily chart, spot gold tests medium-term support at $1530/ounce. Long tails indicate buying support but the rising dollar continues to apply downward pressure. Breach of support and follow-through below $1500 would signal a long-term decline to $1200/ounce*. Declining 63-day Twiggs Momentum (below zero) already indicates a primary down-trend. Recovery above $1600 is less likely but would indicate that the down-trend is weakening.
* Target calculation: 1500 – ( 1800 – 1500 ) = 1200
Treasury yields fall as investors flee stocks
Treasury yields fell through the key support level of 1.70 percent as investors, seeking a safe haven, flowed into bonds. Declining 63-day Twiggs Momentum warns of further easing.
* Target calculation: 1.70 – ( 2.40 – 1.70 ) = 1.0
Australia: ASX 200 breaks triangle
The monthly chart of the ASX 200 displays a downward breakout from the ascending triangle, forming since September 2011, offering a target of the 2008 low at 3200*. Reversal of 63-Day Twiggs Momentum below zero also suggests continuation of the primary down-trend.
* Target calculation: 3800 – ( 4400 – 3800 ) = 3200