Colin Twiggs, Author at the patient investor

February 7, 2013

When galaxies collide – the enormity of space

Two Galaxies Collide

Amazing photo from Hubble space telescope depicts the enormity of space. When two galaxies pass through or close by each other the competing gravitational fields tear the galaxies apart. The upper left galaxy used to be a normal spiral galaxy until about 100 million years ago when the one on the right approached too close. You get an idea of the scale when you consider that each of the pin-pricks of light is an individual star with its own solar system.

Our own Milky Way galaxy contains between 100 billion and 400 billion stars, but even galaxies are dwarfed by massive superclusters. Fraser Cain at Universe Today explains:

The supercluster we live in is known as the Virgo Supercluster. It’s an enormous collection of more than a million galaxies, stretching across a region of space 110 million light-years across. Our Sun is just one member of the Milky Way, and the Milky Way is part of a collection of galaxies known as the Local Group. This contains three large spiral galaxies: the Milky Way, Andromeda, and the Triangulum Galaxy, as well as a few dozen dwarf galaxies. The Local Group is just one member of the Virgo Cluster. This is a collection of 1200-2000 galaxies that stretch across 15 million light-years of space. And then, the Virgo Cluster is just one cluster in the Virgo Supercluster.

……The Virgo Supercluster is just one of millions of superclusters across the Universe.

If the average galaxy is only 1/100th of the size of the Milky Way (i.e. between 1 and 4 billion stars) and the average supercluster contains a million galaxies, then the universe contains at least 1 Sextillion (or 10^18) stars.

See more photos at BuzzFeed: 18 Astounding Hubble Photos Released In 2012 | Donna Dickens

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.

February 7, 2013

Japanese Yen: How long will the rally last?

This long-term semi-log chart of the dollar against the yen puts the current rally into perspective. Expect resistance at ¥100. Breakout would signal reversal of the 40-year down-trend, while respect would indicate another test of ¥75.

Euro/USD

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.

February 7, 2013

Sterling double top

Sterling is headed for a test of primary support at $1.53* after completing a double top. Oscillation of 63-day Twiggs Momentum in a similar range to the last year would indicate a ranging market in the longer term — between $1.53 and $1.63.
Pound Sterling/USD

* Target calculation: 1.58 – ( 1.63 – 1.58 ) = 1.53

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.

February 7, 2013

Aussie Dollar: Momentum falling

The Aussie Dollar is again testing support at $1.03 on the weekly chart. Respect would indicate further consolidation — and a test of resistance at $1.06 — while failure would offer a target of parity ($1.00). Reversal of 63-day Twiggs Momentum below zero would favor a downward breakout.

Aussie Dollar/USD

* Target calculation: 1.03 – ( 1.06 – 1.03 ) = 1.00

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.

February 7, 2013

Euro finds new support

The Euro is testing its new support level at $1.35 on the weekly chart. Respect would confirm the primary up-trend. Rising 63-day Twiggs Momentum (above zero) strengthens the signal. Reversal below $1.32 and the rising trendline is unlikely but would indicate a bull trap — and test of primary support at $1.20.

Euro/USD

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.

February 7, 2013

Gold and commodities rising

Gold is forming a base between $1650 and $1700/ounce on the daily chart. Upward breakout would offer an initial target of $1750/ounce. Oscillation of 63-day Twiggs Momentum close to the zero line indicates consolidation but beware of a peak below zero — or reversal below $1650 on the spot chart — which would warn of another down-swing.

Spot Gold

* Target calculation: 1700 + ( 1700 – 1650 ) = 1750

Silver displays a similar long-term pattern to gold, albeit with a sharper spike in 2011. Bullish divergence on 63-day Twiggs Momentum suggests an up-trend. Breakout above $35/ounce ($1800 in the case of gold) would signal a long-term advance.

Silver

Brent and Nymex crude both threaten an upward breakout from their recent consolidation — which would signal a primary advance to their 2012 highs.

Crude Oil

Commodity prices are also improving, with Dow Jones-UBS Commodity index displaying a bullish divergence on 63-day Twiggs Momentum. Breakout above 150 would complete an inverted head and shoulders reversal with a target of 175. Rising commodities — other than gold and oil where other factors need to be considered — would suggest a recovering global economy and further gains for stocks in the year ahead.

US Dollar Index

* Target calculation: 150 + ( 150 – 125 ) = 175

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.

February 6, 2013

Hedge Funds Are Now Buying Stocks While Retail Investors Sell | Business Insider

Matthew Boesler writes:

We have noted how, based on weekly data from BofA Merrill Lynch, it appears that hedge funds have been sellers of stocks for the last several weeks, while on the flip-side of the coin, individual investors have been buying up stocks at a rapid pace over the same timeframe. Now – coincident with the “rough patch” the S&P 500 has run into the market hasn’t really gone down, just sideways – those roles appear to have reversed.

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.

February 6, 2013

High Frequency Trading Fake Quotes | Business Insider

Linette Lopez writes:

Nanex, a Chicago-based market research firm, sent us a chart that illustrates what can stand in a trader’s way when they’re trying to quote the right price……

“It happens all the time,” [Nanex CEO Eric] Hunsader told Business Insider. “It crowds out legitimate prices… it’s like SPAM. Maybe one of these guys is a legit offer but there’s no way of knowing.”

View chart at High Frequency Trading Fake Quotes – Business Insider.

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.

February 5, 2013

Getting the Property Problem Wrong | David D. Friedman | Libertarianism.org

David D. Friedman, in his reply to Matt Zwolinski, says that the solution to the conflict between individual freedom and property rights lies with distinguishing between ownership rights over uncreated property, such as land, and ownership over created property, such as a crop of wheat (or a railroad train):

….You wish to stand on a certain piece of common property. I am there already. You have the same right as I do to stand there, but you do not have a right to move or injure me, hence you cannot exercise your right to stand there without acting unjustly. I have not appropriated the land I am standing on in the usual sense of the term, but I have “de facto” appropriated it for as long as I stand there, not by altering the nature of your right to the land but by making it impractical for you to exercise it without violating other rights.

…..I plant wheat in a field. You come and want to plant wheat in the same field. I point out to you that the field is common property which you are welcome to use, but the wheat I have planted is my property (the result of my labor in gathering seeds, watering them so they would sprout, etc.) and you do not have the right to disturb it. Any way you can figure out to exercise your right to the field without violating my right to the wheat is fine with me.

Taking the last example, a problem arises if one individual plants the entire common area with wheat, preventing anyone else from doing so and causing them to starve. There have to be conventions in the use of common property — which have evolved over time into property rights.

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.