Colin Twiggs, Author at the patient investor

May 23, 2012

Keen to be heard | BRW

Nick Gardner: In 2008, private debt in the US grew $4.1 trillion but in 2010 shrunk $2.85 trillion as banks decreased their lending as a result of the housing crash. When subtracted from GDP, this fall in debt equated to a 38 per cent reduction in aggregate demand, leading directly to the “great recession” and unemployment hitting its highest level in almost 30 years. “This is what people find so confusing,” says Keen. “When you look at GDP numbers in the US, they’re not bad. At the beginning of 2008, US GDP was $14.25 trillion and today it has GDP of $14.75 trillion. That’s stagnant growth but doesn’t explain the enormous depths of the US downturn. It only begins to makes sense when you look at the fall in aggregate demand.”

via Keen to be heard.

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.

May 22, 2012

Hong Kong & China: Hang Seng breaks support

Hong Kong’s Hang Seng Index fall below 20000 confirms the earlier primary down-trend signaled by 63-day Twiggs Momentum reversal below zero. Expect a rally to test the new resistance level at 20000. Respect would indicate a decline to 17500. Recovery above 20000 is unlikely but would warn of a bear trap.

Hang Seng Index

Dow Jones Shanghai Index is more resilient, respecting the rising trendline and with 63-day Twiggs Momentum above zero. Breakout above 310 would signal a primary up-trend, but penetration of the rising trendline would test primary support at 275.

Dow Jones Shanghai Index

* Target calculation: 310 + ( 310 – 280 ) = 340; 280 – ( 310 – 280 ) = 250

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.

May 22, 2012

Australia: ASX 200 rallies

The ASX 200 rallied off secondary support at 4050. Respect of resistance at 4150 would signal a test of primary support at 3980/4000. Another 21-day Twiggs Money Flow peak below the zero line would strengthen the bear signal. 63-Day Twiggs Momentum below zero also warns of a primary down-trend.

ASX 200 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.

May 22, 2012

Japan & South Korea

Japan’s Nikkei 225 Index is headed for a test of primary support at 8000 after breaking both support at 9000 and the rising trendline. 13-Week Twiggs Money Flow below zero warns of long-term selling pressure. Breach of 8000 would resume the primary down-trend, offering a long-term target of 6000*.

Nikkei 225 Index

* Target calculation: 8000 – ( 10000 – 8000 ) = 6000

Dow Jones South Korea Index is retracing to test resistance at 425 after a sharp fall below the rising trendline. Reversal of 63-day Twiggs Momentum below zero warns of a primary down-trend. Failure of primary support at 380 would confirm, signaling a decline to the 2011 low of 350.

Dow Jones South Korea 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.

May 22, 2012

India & Singapore

India’s Sensex found short-term support at 16000, but 21-day Twiggs Money Flow below zero indicates continued selling pressure. Breach of 16000 would test the band of primary support at 15000.

BSE Sensex Index

The Nifty similarly found short-term support at 4800, but 63-day Twiggs Momentum below zero warns of a continuing primary down-trend. Failure of the 4800 level would test primary support at 4500.

NSE Nifty Index

Dow Jones Singapore Index found short-term support at 222 — the 61.8% Fibonacci level. Expect a rally to test 230 but respect would warn of a decline to test primary support at 203. 63-Day Twiggs Momentum crossed below zero, warning of a primary down-trend.

Dow Jones Singapore 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.

May 22, 2012

UK & Europe: Closer to the breach

Europe inches closer to the point when the artificial levee, built to protect European banks from market forces, is breached. Germany and France delay the inevitable while they attempt to restore bank balance sheets — by widening interest margins at the expense of depositors and transferring risky bonds to the European Central Bank . They do their utmost to avert a Greek default, because of contagion risk to the rest of the euro-zone, but their actions merely encourage more strident demands from Greece. If the levee breaks, damage will be that much greater because of the build-up of market forces behind the artificial barrier.

Spain’s Madrid General Index broke support at the 2009 low of 700, signaling another primary decline with an immediate target of 600*. Reversal of 13-week Twiggs Money Flow below zero reinforces the signal.

Madrid General Index

* Target calculation: 750 – ( 900 – 750 ) = 600

Italy’s MIB Index broke primary support at 13000, confirming the earlier signal from 63-day Twiggs Momentum and offering a long-term target of 10000*. Recovery above 13500 is unlikely but would warn of a bear trap.

Italy MIB Index

* Target calculation: 13500 – ( 17000 – 13500 ) = 10000

Germany’s DAX broke support at 6500 and is testing the rising trendline. Support remains strong, with 13-week Twiggs Money Flow holding above zero, but breach of the rising trendline and breach of short-term support at 6200 would indicate a test of primary support at 5400.

Germany DAX Index

France’s CAC-40 is also headed for a test of primary support at 2800. Reversal of 13-week Twiggs Money Flow below zero warns of selling pressure. Failure of primary support would offer a long-term target of 2000*.

France CAC-40 Index

* Target calculation: 2800 – ( 3600 – 2800 ) = 2000

The FTSE 100 found short-term support at 5300 but breach of the rising trendline and 63-Day Twiggs Momentum below zero warn of a primary down-trend. Failure of primary support at 5000/5050 would offer a long-term target of 4000*.

FTSE 100 Index

* Target calculation: 5000 – ( 6000 – 5000 ) = 4000

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.

May 21, 2012

Bad news for Canadian stocks

Canada’s TSX 60 index broke through primary support at 650, confirming the primary down-trend signaled by 63-day Twiggs Momentum. Expect a decline to 580*. Recovery above 650 is unlikely at present, but would warn of a bear trap.

TSX 60 Index

* Target calculation: 650 – ( 720 – 650 ) = 580

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.

May 21, 2012

US: S&P 500 and Nasdaq rally

The S&P 500 rallied off support at 1290/1300, the 50% Fibonacci retracement level. Respect of resistance at 1350/1360 would indicate a strong correction. Likewise a 21-day Twiggs Money Flow peak below zero would be a strong bear signal. The primary trend remains upward, with support a long way off at 1150.

S&P 500 Index

On the weekly chart, the Nasdaq 100 displays a solid bounce off support at 2500 and the rising trendline. Respect of resistance at 2650 would indicate a test of 2400. A 63-day Twiggs Momentum trough above zero would reinforce the primary up-trend, but momentum is falling fast and penetration of the zero line would warn of reversal to a down-trend.

Nasdaq 100 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.

May 21, 2012

Kevin O'Leary: Don't buy gold stocks

Kevin O’Leary of O’Leary Funds/ ABC’s Shark Tank/ CBC’s Dragon’s Den.
Cash is king, buy dividend stocks. Buy gold, don’t buy gold stocks.

Hat tip to Kesil

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.

May 20, 2012

Chinese economics: Is iron ore demand real?

Reuters video: Nicholas Zhu, ANZ Bank head of macro-economic data Asia, examines iron ore stockpiles at Qingdao port.

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Hat tip to Houses and Holes

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.