Colin Twiggs, Author at the patient investor

January 25, 2013

ASX 200 approaches key resistance level

The ASX 200 is headed for a test of resistance at 5000, supported by rising 63-day Twiggs Momentum and 13-week Twiggs Money Flow (shown below) signaling buying pressure. Breakout would signal an advance to 6000. S&P 500 breakout above its 2007 high would enhance buying pressure, while failure would suggest a re-test of medium-term ASX 200 support at 4500.

ASX 200 Index

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

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.

January 25, 2013

S&P 500 threatens breakout

The S&P 500 is headed for a test of the 2000/2007 highs at 1550/1565. Expect resistance but troughs above the zero line on 13-week Twiggs Money Flow indicate long-term buying pressure. Breakout is likely and would signal an advance to 1750*. Breach of the rising trendline would test of support at the long-term trendline — around 1400.

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.

January 25, 2013

A new Gold Standard is being born | Telegraph Blogs

Ambrose Evans-Pritchard writes:

The world is moving step by step towards a de facto Gold Standard, without any meetings of G20 leaders to announce the idea or bless the project. Some readers will already have seen the GFMS Gold Survey for 2012 which reported that central banks around the world bought more bullion last year in terms of tonnage than at any time in almost half a century. They added a net 536 tonnes in 2012 as they diversified fresh reserves away from the four fiat suspects: dollar, euro, sterling, and yen…….

It is no secret that China is buying the dips, seeking to raise the gold share of its reserves well above 2pc.

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.

January 25, 2013

Scam complete: US government takes a page from Diocletian’s book | Business Insider

Simon Black writes:

As with any good scam, the government must maintain public confidence. The moment someone says ‘the Emperor has no clothes,’ that shallow, fragile confidence will come crashing down and expose the scam. Dissent must be vigorously and swiftly pursued.

So when S&P finally downgraded the US one notch in August 2011, the SEC and Justice Department announced that S&P was under investigation, just two weeks later.

Egan-Jones, a smaller rating agency, has been even more aggressive, downgrading the US credit rating three times in 18 months. And while the federal government may not have imposed Diocletian’s death penalty, they are just as willing to squash dissent.

In a country that churns out thousands of pages of new regulations each week, it’s easy to find a reason to go after someone. As you read this letter, in fact, you are probably in violation of at least a dozen regulatory offenses.

In the case of Egan-Jones, the SEC brought administrative action against the agency within two weeks of their second downgrade. And a few days ago, the case was settled.

I’m sure you have already guessed the ending: Egan-Jones is banned from for the next 18 months from rating US government debt. They’ve effectively been silenced from telling the truth…..

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.

January 25, 2013

German Press Review of Cameron Call for British EU Referendum | SPIEGEL ONLINE

The center-right Frankfurter Allgemeine Zeitung writes:

“Cameron’s strategy may be dangerous, but his analysis isn’t wrong. Euro-zone integration is getting ever deeper and that has consequences for EU countries that are not part of the common currency. In general, the competitive capacity across the EU leaves a lot to be desired. And the people are growing more and more distant from ‘Europe’ and its institutions. None of this can be disputed. A few things need to be settled. Is it imperative that we continue transferring more power to ‘Brussels’? In what areas is it essential, indispensable in fact, that we act together? What role should national parliaments play in European policies? What’s clear is what the British do and do not want: They want an internal market and cooperation between member states, but they do not want an ‘ever-closer union’.”

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.

January 25, 2013

Canada: TSX breakout

The TSX Composite broke through 12800, confirming the primary up-trend signaled earlier by a 13-week Twiggs Money Flow trough above zero and 12500 breakout. Expect an advance to the 2011 high of 14300*.

TSX Composite Index

* Target calculation: 12800 + ( 12800 – 11300 ) = 14300

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.

January 24, 2013

Sterling: double top warns of fall

Gavyn Davies writes on BOE governor Mervyn King’s UK economic policy speech on Tuesday in FT Blogs:

The governor gives an extremely broad hint that he would like sterling to be much lower against other currencies. In his view, the drop of 25 per cent in sterling, which happened between late 2007 and the beginning of 2009, was “certainly necessary” for a full rebalancing of the UK economy.

If we take a look at the long-term view, sterling is ranging in a narrow band against the greenback after a sharp fall in 2008. 63-day Twiggs Momentum oscillating close to the zero line (within 5%) is typical of a ranging market.
Pound Sterling/USD
Completion of a double top on the weekly chart signals a down-swing to primary support at $1.53*. 63-day Twiggs Momentum below zero strengthens the signal.

* 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.

January 24, 2013

Aussie Dollar tests support

Staying with long-term, monthly charts we can see the Aussie Dollar consolidating in a narrow range below resistance at $1.06. Oscillation of 63-day Twiggs Momentum close to zero also indicates a ranging market. Upward breakout is more likely and would signal an advance to $1.10*, while reversal below $1.02 would re-test primary support at $0.96.

Aussie Dollar/USD

* Target calculation: 1.06 + ( 1.06 – 1.02 ) = 1.10

On the daily chart, the Aussie is testing support at $1.05. Failure would signal another correction to test $1.02, while respect would suggest breakout above $1.06 — and a long-term advance to $1.10.

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.

January 24, 2013

Euro up-trend

The Euro is headed for a test of resistance at $1.35 on the monthly chart. Breakout would confirm the primary up-trend. Rising 63-day Twiggs Momentum (above zero) strengthens the signal. Reversal below $1.30 and the rising trendline, however, would indicate another 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.

January 24, 2013

Gold and commodities find support

A look at the long-term (monthly) chart shows gold undergoing a correction before encountering support at $1650/ounce. Recovery above $1700 would re-test resistance at $1800, the higher trough suggesting resumption of the primary up-trend. Breakout above $1800 would confirm. A 63-day Twiggs Momentum trough close to the zero line would strengthen the signal, while reversal below zero would suggest that the 5-year bull-trend is over and a test of primary support at $1500 likely.

Spot Gold

Commodity Prices are a good predictor of stock market performance. Dow Jones-UBS Commodity Index retreated from 150 but support around 140 would indicate another attempt at a breakout — and recovery above 144 would strengthen the signal. Rising Twiggs Momentum suggests a primary up-trend but only breakout above 152 would confirm.

US Dollar 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.