Author: 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.
Posted on

Congress Passes Fiscal Cliff Deal – WSJ.com

WSJ writes that Congress passed a compromise bill to avert the fiscal cliff:

The bill …… was passed over opposition from conservative Republicans in the House who objected to the fact that it contained no long-term spending cuts of any significance. Both the U.S. Senate and House of Representatives approved a bipartisan deal to block most impending tax increases and postpone spending cuts. The WSJ’s Mark Cranfield explains what the deal means for the U.S. deficit. The House voted 257-167, with 172 Democrats joining 85 Republicans in supporting the measure. Voting against the bill were 151 Republicans, and the GOP leadership split over the issue: House Majority Leader Eric Cantor (R., Va.) voted against it, while House Speaker John Boehner (R., Ohio) voted for it. Also supporting the bill was Rep. Paul Ryan (R., Wis.) the GOP vice presidential nominee who has been an ardent opponent of increasing taxes.

Read more at Congress Passes Fiscal Cliff Deal – WSJ.com.

Posted on

Disappointing fiscal cliff compromise

Vice President Joe Biden and Senate Minority Leader Mitch McConnell (R, Ky) brokered a deal that is likely to be approved by the Senate early Tuesday before being put to a vote in the House later in the day. The WSJ writes:

By waiting until the last minute, and reaching a deal on a much smaller scale than either side once envisioned, Washington also deferred many of its thorniest questions for perhaps as little as a few weeks. In late February of early March, the Treasury Department will run out of extraordinary measures to deal with the government’s borrowing limit — which it reached on Monday — and Congress would need to approve an increase. The delay in the spending cuts will run out about the same time. In effect, Congress has delayed the fiscal cliff by erecting a new and potentially more dangerous one.

Read more at The Fiscal Cliff – WSJ.com.

Posted on

Wishing you peace and goodwill

Christmas

Wishing you peace and goodwill over the Christmas season and prosperity in the year ahead.

I am on vacation until mid-January but will continue to post if I see anything important.

Regards,
Colin Twiggs

Posted on

Stocks: Outlook for 2013

Quarterly charts for the last two decades give a good idea of where stocks will be headed in 2013.

The S&P 500 is headed for a test of its 2000/2007 high at 1550. Declining 63-day Twiggs Momentum indicates that resistance is unlikely to be broken. While this does not mean another fall to 750, it does suggest a strong correction.

S&P 500 Index

Apple Inc. [AAPL] is no longer leading the advance but testing primary support at 500. Failure of support would confirm the primary down-trend indicated by a 63-day Twiggs Momentum peak below zero.

Apple

Germany’s DAX is also headed for a test of its 2000/2007 high, at 8200, but rising momentum indicates that breakout above resistance is likely.

DAX Index

The FTSE 100 is also advancing but is some way off its earlier high of 7000 and breakout appears unlikely.

FTSE 100 Index

India’s Sensex is more bullish and likely to break resistance at 21000.

BSE Sensex Index

The Shanghai Composite is headed in the opposite direction and likely to re-test long-term support at 1800/1750. Rising 63-day Twiggs Momentum (below zero) suggests that a bottom will form at this level.

Shanghai Composite Index

The ASX 200 is headed for a test of resistance at 5000, supported by rising 63-day Twiggs Momentum. Breakout would signal an advance to 6000, but weakness in China and the US may delay this for some time.

ASX 200 Index

Posted on

How the Welfare State Traps the Poor in Dependency, the British Version « International Liberty

Dan Mitchell describes how withdrawal of welfare benefits as your income rises can create a tax cliff that discourages the unemployed from seeking more work.

A graphic from British newspaper The Spectator gives this example:

John 21, works 25 hours per week at a gross wage of £5.70 per hour.
Of which 63p in tax/National Insurance and £4.18 in benefits (housing and council tax) is withdrawn.
Net income from work: 89p per hour.
84% of wage is lost in tax and benefit withdrawal!

Read more at How the Welfare State Traps the Poor in Dependency, the British Version « International Liberty.

Posted on

Cutting taxes is a largely ineffective strategy for attracting foreign investment | EUROPP

Aidan Regan writes:

The Irish have the second best trade surplus in the eurozone, and productivity per worker is three times higher than Germany….. The truth of this fairy-tale is that US multinational corporations are engaged in transfer pricing. They locate profits in Ireland to take advantage of the low corporate tax regime.

Read more at Cutting taxes is a largely ineffective strategy for attracting foreign investment. | EUROPP.

Posted on

A Land Without Guns: How Japan Has Virtually Eliminated Shooting Deaths – Max Fisher – The Atlantic

Max Fisher describes why Japan has one of the lowest rates of firearm-related deaths in the world: 0.07 per per 100,000 population in one year, compared to 9.20 for the US.

To get a gun in Japan, first, you have to attend an all-day class and pass a written test, which are held only once per month. You also must take and pass a shooting range class. Then, head over to a hospital for a mental test and drug test (Japan is unusual in that potential gun owners must affirmatively prove their mental fitness), which you’ll file with the police. Finally, pass a rigorous background check for any criminal record or association with criminal or extremist groups, and you will be the proud new owner of your shotgun or air rifle. Just don’t forget to provide police with documentation on the specific location of the gun in your home, as well as the ammo, both of which must be locked and stored separately. And remember to have the police inspect the gun once per year and to re-take the class and exam every three years.

via A Land Without Guns: How Japan Has Virtually Eliminated Shooting Deaths – Max Fisher – The Atlantic.

Posted on

Asia: China rally

China’s Shanghai Composite Index is testing resistance at 2150. While a large correction — signaled by breakout above 2150 — is not a reliable reversal signal, it does indicate that a bottom is forming. Bullish divergence on 63-day Twiggs Momentum also suggests a reversal. But only a higher trough followed by a new high on the index chart would confirm.

Shanghai Composite Index

India’s Sensex is consolidating in a narrow range below 19500. Breakout is likely and would indicate an advance to 20000*. Oscillation of 13-week Twiggs Money Flow above zero indicates long-term buying pressure, but bearish divergence warns of medium-term resistance. Reversal below 19000 is unlikely but would warn that the advance is losing momentum.

Sensex Index

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

Japan’s Nikkei 225 Index is advancing to resistance at 10000/10200*. Rising 63-day Twiggs Momentum indicates buying pressure; look for a trough above zero to confirm.

Nikkei 225 Index

* Target calculation: 9200 + ( 9200 – 8200 ) = 10200

Posted on

DAX breakout

DAX follow-through above 7600 would confirm its earlier (7500) breakout signal for a primary advance. One concern: 13-week Twiggs Money Flow is lagging. This may be due to resistance at the 2011 high, but a lower TMO peak would warn of a reversal.

DAX Index

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

The FTSE 100 is testing long-term resistance at 6000/6100 but 13-week Twiggs Money Flow, again lagging, warns of selling pressure. Respect of resistance would re-test support at 5600, while breakout would offer an initial target of 6400; long-term 6750*.

FTSE 100 Index

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

Posted on

Canada: TSX Composite approaches 12500

The TSX Composite continues to range between 11200 and 12800, but 13-week Twiggs Money Flow oscillating above zero reflects long-term buying pressure.  Breakout above 12500 would signal a primary advance, while follow-through above 12800 would confirm, offering a target of 14000*.

TSX Composite Index

* Target calculation: 12500 + ( 12500 – 11000 ) = 14000

Powered by WordPress / WordPress Maintenance Service By Website Helper