Colin Twiggs, Author at the patient investor

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

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

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.

January 21, 2013

Dragon Baby

Amazing what you can do with special effects.

With thanks to Ryan.

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 20, 2013

Tarantula Nebula in the Large Magellanic Cloud

The Tarantula Nebula in the Large Magellanic Cloud
Source: Hubblesite.org

Hubble Space Telescope composite image of a portion of the Tarantula Nebula’s central cavity. The flood of UV light and gusts of hot particles flowing freely from the young stars of 30 Doradus have hollowed out a bubble in the gaseous nebula. Only with Hubble’s exceptional resolution could the intricacy and three-dimensionality of these features be revealed.

The Hubble data have been combined with ground-based observations that trace hydrogen gas (in red) and oxygen (in blue). Together, this region can be appreciated as a microcosm of the larger nebula: a swirling palette of gas, dust, and stars in the midst of tumultuous upheaval.

Stars in the nebula number more than half a million.

Hat tip to Barry Ritholz.

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 17, 2013

Euro advances

The Euro is advancing against the weakening dollar. Target for the advance is the long-term declining trendline on the monthly chart — around $1.40. A primary up-trend is signaled by 63-day Twiggs Momentum recovery above zero.

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.