The ASX 200 broke resistance at 5340/5350 in the first hour of trading this morning. Expect retracement to test the new support level on the hourly chart. Respect would confirm that the correction is over.
Aussie Dollar and ASX find support
The Australian Dollar is testing resistance at $0.8900, but the primary trend is down. Breakout would suggest a bear rally, while respect would warn of another decline. 13-Week Twiggs Momentum below zero indicates a primary down-trend. Breach of primary support at $0.8650 would offer a target of $0.80*.
* Target calculation: 0.87 – ( 0.94 – 0.87 ) = 0.80
ASX 200 penetrated its descending trendline, suggesting the correction is over. The index would be further buoyed by a rally of the Aussie Dollar. Bullish divergence and recovery of 21-day Twiggs Money Flow above zero indicates medium-term buying pressure. Breach of resistance at 5350 would strengthen the bull signal. Reversal below 5250, however, would warn of a test of primary support at 5000/5050.
* Target calculation: 5350 – ( 5650 – 5350 ) = 5050
The ASX 200 VIX at 15.5 continues to indicate low risk typical of a bull market. A significantly higher trough is unlikely, but would be a bearish sign.
October sell-off: Drawing to a close?
- DAX and FTSE find support, but remain in a down-trend
- China is bullish, but Japan bearish
- US stocks find support and continue to indicate a bull market
- ASX respects primary support
The S&P 500 found support at 1820 and is testing resistance at 1900. Breach of resistance would suggest that the correction is over. 21-Day Twiggs Money Flow below zero, however, continues to warn of medium-term selling pressure. Respect of resistance is more likely, indicating another test of support at 1800*.
* Target calculation: 1900 – ( 2000 – 1900 ) = 1800
CBOE Volatility Index (VIX) retreated to 22, indicating moderate risk, but nowhere near the 30+ levels typical of a bear market.
Dow Jones Industrial Average recovered above resistance (the former support level) at 16300, the long tail indicating short-term buying pressure. Follow-through above the descending trendline would signal that the correction is over. Recovery above the recent highs at 25% on 13-week Twiggs Money Flow would suggest that buyers have regained control.
Germany’s DAX is retracing to test resistance at 9000. Respect would confirm a primary down-trend. 13-Week Twiggs Momentum below zero strengthens the bear signal. Target for the decline is 8000*. Recovery above 9000 remains unlikely, but would warn of a bear trap.
* Target calculation: 9000 – ( 10000 – 9000 ) = 8000
The Footsie displays a similar long tail, indicating buying pressure. Recovery above 6500 is unlikely, but would warn of a bear trap. Respect of resistance would offer a target of 6000*.
* Target calculation: 6400 – ( 6800 – 6400 ) = 6000
China’s Shanghai Composite Index is testing support at 2340/2350. Breach would warn of a correction. But the primary up-trend remains and rising 13-week Twiggs Money Flow signals medium-term buying pressure.
Japan’s Nikkei 225 Index plunged through support at 14800, warning of a test of primary support at 13900/14000. Reversal of 13-week Twiggs Money Flow below zero indicates (long-term) selling pressure.
The ASX 200 recovered above resistance at 5250 and the descending trendline, suggesting that the correction is over. Bullish divergence and a rising 21-day Twiggs Money Flow (above zero) indicates medium-term buying pressure. Recovery above 5350 would confirm that buyers are back in control, while reversal below 5250 would indicate another test of 5000/5050.
* Target calculation: 5350 – ( 5650 – 5350 ) = 5050
ASX 200 VIX remains below 20, indicating low risk typical of a bull market.
Aussie & Euro rally, but for how long?
The Aussie Dollar continues to pressure primary support at $0.8650. 13-Week Twiggs Momentum below zero indicates a primary down-trend. Respect of resistance at $0.89 would strengthen the signal. Breach of primary support would confirm, offering a target of the 2010 low at $0.80.
* Target calculation: 87 – ( 94 – 87 ) = 80
The Euro retraced to test its new resistance at $1.28. Declining 13-week Twiggs Momentum (below zero) confirms a strong down-trend. Respect of resistance would warn of another decline, while breach of medium-term support at $1.25 would target the 2010/2011 lows of $1.20.
* Target calculation: 1.28 – ( 1.40 – 1.28 ) = 1.16
Why Australian Consumers Are Happy With Their Finances But Aren’t Spending | Business Insider
From Greg McKenna:
There is a lot of focus on the wealth of Australians through property and super but many Australian households and Australian households in aggregate are still carrying a large amount of debt. A stock of debt which must be repaid with a flow of earnings no matter how wealthy they might be on paper.
So consumers are more confident about their finances and their financial future but they aren’t spending — yet.
Something that puzzles me is why household debt as a percentage of disposable income is constant. If consumers have accelerated their credit card and mortgage debt repayments, surely this figure should be falling.
Read more at Here's The Best Explanation Of Why Australian Consumers Are Happy With Their Finances But Aren't Spending | Business Insider.
ASX and Aussie Dollar rally
The Australian Dollar found support at $0.8650/$0.8700. Respect of resistance at $0.8900, however, would suggest another decline. 13-Week Twiggs Momentum below zero warns of a primary down-trend. Breach of primary support at $0.8650 would offer a target of $0.80*.
* Target calculation: 0.87 – ( 0.94 – 0.87 ) = 0.80
The ASX 200 rallied in line with short-term buoyancy on the Aussie Dollar. Bullish divergence on 21-day Twiggs Money Flow and recovery above zero indicates medium-term buying pressure. But the trend remains down and failure of (short-term) support at 5120 would warn of a test of primary support at 5000/5050. Breach of the declining trendline is unlikely, but would suggest that the correction is ending. Follow-through above 5350 would confirm.
* Target calculation: 5350 – ( 5650 – 5350 ) = 5050
The ASX 200 VIX continues to indicate low risk typical of a bull market.
October sell-off continues
- DAX and FTSE break support, signaling a down-trend
- China is bullish, but rest of Asia is bearish
- US stocks are correcting, but continue to indicate a bull market
- ASX testing primary support
The quarter-end sell-off has been exacerbated by weakness in Europe.
Germany’s DAX broke primary support at 8900/9000, signaling a (primary) down-trend. Reversal of 13-week Twiggs Money Flow below zero strengthens the bear signal. Target for the decline is 8000*. Recovery above 9000 is unlikely, but would warn of a bear trap.
* Target calculation: 9000 – ( 10000 – 9000 ) = 8000
The Footsie displays similar weakness, breaching primary support at 6400/6500. Target for the decline is 6000*. Recovery above 6500 is unlikely, but would warn of a bear trap.
* Target calculation: 6400 – ( 6800 – 6400 ) = 6000
China’s Shanghai Composite Index is holding above its new support at 2340/2350, but expect retracement to at least 2250 in response to US/European weakness.
Japan’s Nikkei 225 Index broke medium-term support at 15500 and the rising trendline to warn of a correction. Reversal of 13-week Twiggs Money Flow below zero would strengthen the signal. Breach of 14800 would indicate a test of primary support at 14000.
The S&P 500 is testing primary support at 1900. Declining 13-week Twiggs Money Flow warns of selling pressure. Reversal below zero would indicate a down-trend, offering a target of 1800*.
* Target calculation: 1900 – ( 2000 – 1900 ) = 1800
CBOE Volatility Index (VIX) rose to above 20, indicating moderate risk, but nowhere near the levels typical of a bear market.
The ASX 200 broke support at 5250/5300, suggesting a test of long-term support at 5000. Declining 13-week Twiggs Money Flow below zero indicates strong selling pressure. Recovery above 5350 is unlikely, but would suggest that the correction is over.
* Target calculation: 5350 – ( 5700 – 5350 ) = 5000
ASX 200 rallies
The ASX 200 rallied on the back of positive sentiment from the US. Follow-through above 5360 would indicate the correction is over. Rising 21-day Twiggs Money Flow reflects short-term buying pressure. Reversal below 5240 remains as likely, however, and would warn of a test of primary support at 5000/5050.
* Target calculation: 5350 – ( 5650 – 5350 ) = 5050
The ASX 200 VIX retreated below 15 — levels typical of a bull market.
ASX finds support
After taking a beating in the morning session, the ASX 200 rallied to close almost unchanged. The long tail and rising 21-day Twiggs Money Flow indicate short-term buying pressure. Follow-through above 5360 and the declining trendline would suggest that the correction is over. But reversal below 5240 remains as likely and would warn of a test of primary support at 5000/5050.
* Target calculation: 5350 – ( 5650 – 5350 ) = 5050
The ASX 200 VIX is creeping upwards, but remains at levels typical of a bull market.
US job growth rebounds
- US job growth rebounds, halting the correction
- Gold and crude oil are falling
- European stocks remain bearish
- Asian stocks are bearish
- US stocks continue to indicate a bull market
We are at the September quarter-end and stock weakness is likely to continue into October.
From the Wall Street Journal:
U.S. job growth rebounded in September and the jobless rate fell below 6% for the first time since mid-2008, suggesting the labor market is improving faster than previously thought. Nonfarm payrolls grew a seasonally adjusted 248,000 last month, the fastest pace since June, the Labor Department said Friday.
The S&P 500 broke downwards from its broadening wedge formation this week, warning of a correction to 1900. But Thursday’s long tail and Friday’s rally indicate buying support below 1950. Another test of 2000 is likely. Respect of resistance would warn of further weakness in October, while breakout would suggest a fresh advance; follow-through above 2020 would confirm.
* Target calculation: 2000 + ( 2000 – 1900 ) = 2100
CBOE Volatility Index (VIX) remains below 20, typical of a bull market.
Dow Jones Euro Stoxx 50 found support at 3100, but this is unlikely to hold. Expect another test of primary support at 3000. Breach would signal a down-trend. Fall of 13-week Twiggs Money Flow below zero would strengthen the bear signal.
* Target calculation: 3000 – ( 3300 – 3000 ) = 2700
Dow Jones Asia Index is headed for a test of 2800 on the weekly chart despite continued bullishness on the Shanghai Composite, reflecting strength in the US Dollar. Penetration of the rising trendline would strengthen the bear signal. Reversal of 13-week Twiggs Momentum below zero also signals a primary down-trend.
The ASX 200 found support at 5250. Recovery above 5350 and the descending trendline would suggest that the correction is over. But respect of resistance remains as likely and breach of 5250 would warn of a test of 5000/5050. Recovery of 21-day Twiggs Money Flow above zero would indicate short-term buying pressure.
* Target calculation: 5650 + ( 5650 – 5350 ) = 5950