Colin Twiggs, Author at the patient investor

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

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 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.

[gigya src=’http://www.reuters.com/resources_v2/flash/video_embed.swf?videoId=235214214&edition=BETAUS’ type=’application/x-shockwave-flash’ allowfullscreen=’true’ allowScriptAccess=’always’ width=’460′ height=’259′ wmode=’transparent’]

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.

May 19, 2012

EconoMonitor : EconoMonitor » Europe’s Depressing Prospects: Two Reasons Why Spain Will Leave the Euro

Michael Pettis: I think Spain [and all the peripheral European countries are similarly uncompetitive] will leave the euro because it seems to me that the country has already started on the self-reinforcing downward spiral that leads to a crisis, and there is no one big enough to reverse the spiral.

How does this process work? It turns out that it is pretty straightforward, and occurs during every one of the sovereign financial crises we have seen in modern history. When a sufficient level of doubt arises about sovereign credibility, all the major economic stakeholders in that country begin to change their behavior in ways that exacerbate the problem of credibility.

Of course as credibility is eroded, this further exacerbates the behavior of these stakeholders. In that case bankruptcy comes, as Hemingway is reported to have said, at first slowly, and then all of a sudden, as the country moves slowly at first and then rapidly towards a breakdown in its debt capacity.

via EconoMonitor : EconoMonitor » Europe’s Depressing Prospects: Two Reasons Why Spain Will Leave the Euro.

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 17, 2012

Forex: Japanese Yen

The US Dollar found support at ¥80 Japanese Yen. A 63-day Twiggs Momentum trough high above zero would indicate a strong up-trend. Recovery above the declining trendline and resistance at ¥82 would strengthen the signal. Failure of support is unlikely but would test primary support at ¥76.

USD/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.

May 17, 2012

Forex: UK and Europe

The Euro is headed for a test of primary support at $1.26 against the greenback, after breaking support at $1.30. Respect of the zero line by 63-day Twiggs Momentum indicates continuation of the primary down-trend. Failure of support would signal a decline to $1.17*.

Euro/USD

* Target calculation: 1.26 – ( 1.35 – 1.26 ) = 1.17

Pound Sterling continues to strengthen against the euro, testing resistance at €1.26*. The 63-day Twiggs Momentum trough high above zero indicates a strong up-trend. Weak retracement which fails to test the new support level around €1.22 would alert us to an accelerating/exponential up-trend.

Pound sterling/Euro

* Target calculation: 1.22 + ( 1.22 – 1.18 ) = 1.26

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 17, 2012

Forex: Australia, Canada, South Africa

Canada’s Loonie broke support at $0.995 and the rising trendline against the greenback, indicating another test of primary support at $0.95. Reversal of 63-day Twiggs Momentum below zero warns of a primary down-trend. Failure of support at $0.95 would confirm.

Canadian Dollar

The Australian Dollar is expected to follow commodities lower, testing primary support at $0.96. 63-Day Twiggs Momentum below zero warns of another primary decline. Recovery above $1.02 is unlikely but would indicate an advance to $1.08.

Australian Dollar

The Australian Dollar strengthened against the South African Rand, but respect of resistance at R8.30 would warn of a decline to R7.50*. Breach of support at R7.90 would confirm. 63-Day Twiggs Momentum oscillating close to zero indicates uncertainty, however, and breakout above R8.30 would test long-term resistance at R8.50.

Australian Dollar/South African Rand

* Target calculation: 8.00 – ( 8.50 – 8.00 ) = 7.50

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 17, 2012

Commodities point to lower stock prices

The CRB Commodities Index broke support at 295, warning of another primary decline. Respect of zero by 63-day Twiggs Momentum strengthens the signal. Divergence between the S&P 500 Index and commodities warns that stocks are over-priced and likely to fall.

CRB Commodities Index and S&P 500 Index

* Target calculation: 295 – ( 325 – 295 ) = 265

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 17, 2012

Crude: Brent and WTI Light

Nymex WTI Light Crude broke support at $96/barrel, warning of a primary down-trend. Reversal of 63-day Twiggs Momentum below zero strengthens the signal, while follow-through below $93 would confirm.

Nymex WTI Light Crude

* Target calculation: 95 – ( 110 – 95 ) = 80

Brent Crude is testing medium-term support at $110/barrel. Failure would indicate a fall to the primary level at $103. Follow-through below $100 would offer a long-term target of $75/barrel*. Reversal of 63-day Twiggs Momentum below zero would strengthen the bear signal.

ICE Brent Afternoon Markers

* Target calculation: 100 – ( 125 – 100 ) = 75

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 17, 2012

Dollar rallies while Gold & Silver fall

The Dollar Index is testing primary resistance at 81.50 on the weekly chart. Respect of zero by the latest 63-day Twiggs Momentum trough suggests continuation of the primary up-trend. Follow-through above 82 would signal an advance to 86*.

US Dollar Index

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

Spot Gold broke support at $1550/ounce on the daily chart. Expect retracement to test the new resistance level at $1600 but a sharp fall below zero by 63-day Twiggs Momentum warns of a primary down-trend. Breach of support at $1500 would confirm, offering a long-term target of $1200*.

Spot Gold

* Target calculation: 1500 – ( 1800 – 1500 ) = 1200

Spot Silver is testing primary support at $26/ounce. 63-Day Twiggs Momentum oscillating below zero already indicates a primary down-trend. Breach of support would offer a target of $16/ounce*.

Spot Silver

* Target calculation: 26 – ( 36 – 26 ) = 16

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.