Colin Twiggs, Author at the patient investor

February 21, 2013

Euro retraces

The Euro retraced to test support and the rising trendline at $1.32. Respect would indicate a primary advance with a target of $1.42*. 63-Day Twiggs Momentum well above zero suggests continuation of the primary up-trend. Failure of support at $1.32, however, would indicate a bull trap — with a target of $1.26.

Euro/USD

* Target calculation: 1.37 + ( 1.37 – 1.32 ) = 1.42

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 20, 2013

Aussie Dollar weakens

The Aussie Dollar is headed for a test of primary support at $1.015 on the weekly chart. Failure of support would offer a target of $0.96, while respect would signal another attempt at $1.06. Reversal of 63-day Twiggs Momentum below zero suggests a downward breakout.

Aussie Dollar/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 20, 2013

Sterling breaks support

The pound broke support at €1.15 against the euro, signaling a test of the 2011 low at €1.10.
Pound Sterling/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 20, 2013

Dollar Index rallies

The Dollar Index rallied to test medium-term resistance at 81. Breakout above 81.50 would test the 2012 high at 84*. Recovery of 63-day Twiggs Momentum above zero suggests a primary up-trend.

US Dollar Index

* Target calculation: 81.5 + ( 81.5 – 79 ) = 84

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 20, 2013

Commodities down

Dow Jones-UBS Commodity Index is headed for a test of primary support at 136. Breach would signal a decline to the 2012 low at 126. The peak below zero on 63-day Twiggs Momentum already warns of a primary down-trend. Recovery above 144 is unlikely but would suggest a rally to 152.

US Dollar Index

A fall in commodities would warn of slack global demand and a bearish outlook for stocks.

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 20, 2013

Gold falls sharply

Gold is headed for another test of primary support at $1525 after breaking support at $1625. Breach of $1525 would signal a primary down-trend. 63-Day Twiggs Momentum breakout below -10% would strengthen the signal, while reversal above zero would suggest further ranging between $1500 and $1800.

Spot Gold

Brent Crude remains above $117/barrel, signaling a primary up-trend. Recovery of Nymex WTI above $99/barrel would confirm. Narrow consolidation below the resistance level is a bullish sign.

US Dollar Index

* Target calculation: 116 + ( 116 – 106 ) = 126

The gold-oil ratio is falling. Decline below 10 is a long-term buying signal for gold. In recent years fluctuations have been a lot narrower and a fall below 12 may be sufficient.
Spot Gold

I am not yet convinced that gold is headed for a primary down-trend. Watch out for bear traps. Respect of primary support around $1500 seems as likely — and would present a buying opportunity.

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 20, 2013

S&P 500 caution

The S&P 500 retreated below 1525, heading for support at 1500. Failure of support would test the secondary trendline at 1475. Bearish divergence on 21-day Twiggs Money Flow warns of selling pressure, but may not be sufficient to start a full-blown correction.

S&P 500 Index

Breach of the secondary trendline at 1475 would indicate a test of primary support at 1350. Recovery of 63-day Twiggs Momentum above 10% would increase likelihood of an upward breakout — with a target of 1750* — while retreat below zero would suggest a primary reversal.
S&P 500 Index

* Target calculation: 1550 + ( 1550 – 1350 ) = 1750

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 18, 2013

ASX 200: The scramble for yield

The ASX 200 broke short-term resistance at 5050 on the hourly chart before retreating to test its new support level. The index is advancing in layers of 25 points (5000 >> 5025 >> 5050 >> 5075) and shows no signs of abating. But retracement to test the new support level of 5000 remains likely in the larger time frames. Respect of support on the weekly chart would confirm a primary advance, with a long-term target of 6000*.

ASX 200 Index

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

One area of concern: the advance is being driven by a scramble for yield, with blue chip stocks in the ASX 50 [$XFL] out-performing mid-caps [$XMD] by a wide margin — the exact opposite of what one would expect in a bull market.

ASX 200 Index

The situation is even worse when comparing to small-caps [$XSO].

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.

February 18, 2013

Asia: India & Japan retreat

India’s Sensex displays a bearish divergence on 13-week Twiggs Money Flow, warning selling pressure. Breach of the secondary trendline — and medium-term support at 19500 — would indicate a correction to 18000.

Sensex Index

* Target calculation: 19 + ( 19 – 18 ) = 20

Japan’s Nikkei 225 Index is retreating from its 2010 high of 11500 on the monthly chart. Reversal below 11000 would suggest a correction to 10000. Respect of support, however, would indicate a fresh primary advance.

Nikkei 225 Index

* Target calculation: 11000 + ( 11000 – 8000 ) = 14000

China’s Shanghai Composite Index was closed last week for Chinese New Year.

Hong Kong’s Hang Seng Index re-opened Thursday, finding support at 23000. Breakout above 24000 would test the 2010 high of 25000. Troughs high above the zero line on 13-week Twiggs Money Flow indicate buying pressure. Reversal below 23000 is unlikely but would warn of a correction.

Shanghai Composite 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.

February 18, 2013

Europe: FTSE advances while DAX retreats

The FTSE 100 is advancing toward long-term resistance at 6750 on the monthly chart. Rising troughs on 13-week Twiggs Money Flow indicate long-term buying pressure.

FTSE 100 Index

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

Germany’s DAX is testing support at 7500. Bearish divergence on 13-week Twiggs Money Flow warns of selling pressure. Failure of 7500 would indicate a correction to test the rising trendline — and support at 7000.

DAX Index

* Target calculation: 7500 + ( 7500 – 7000 ) = 8000

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.