The ASX 200 is testing resistance at 5380. Rising 21-day Twiggs Money Flow indicates medium-term buying pressure. Follow-through above 5400 would suggest another advance. Respect of 5380 is unlikely, but would warn of another correction.
* Target calculation: 5350 + ( 5350 – 5050 ) = 5650
ASX 200 VIX below 15 indicates low market risk.
The ASX 200 recovered above 5200 Monday after a last week’s hammer candlestick flagged support. Follow-through above the descending trendline would suggest another advance. Breakout above 5400 would confirm. A 13-week Twiggs Money Flow trough above zero would strengthen the signal. Failure to break the descending trendline would warn of another decline, however, and breach of 5000 would signal a primary down-trend.
The ASX 200 VIX retreated to below 15, reflecting low market risk.
The ASX 200 is at far greater risk of reverting to a primary down-trend. Retreat of 13-week Twiggs Money Flow below zero, after a bearish divergence, warns of strong selling pressure. Failure of support at 5050 would strengthen the signal, while breach of 5000 would confirm. Respect of the rising trendline is unlikely, but would continue the up-trend.
Breach of support at 5000 would suggest a fall to the long-term trendline, around 4600. Reversal of 13-week Twiggs Momentum below zero again suggests a primary down-trend.
The ASX 200 VIX is rising, but below 20 still reflects low market risk.
Also, none of our macro-economic/volatility indicators indicate elevated risk, but you can’t argue with the tape.
With secondary weakness in both China and the US, the ASX 200 broke support at 5200, signaling another correction. Reversal of 21-day Twiggs Money Flow below zero suggests short-term selling pressure. Recovery above 5250 is unlikely, but would indicate a bear trap. Failure of primary support at 5050 would warn of a primary down-trend.
The monthly chart illustrates the importance of primary support at 5000. Breach would confirm the down-trend, suggesting a fall to the long-term trendline, around 4600.
* Target calculation: 5300 + ( 5300 – 5200 ) = 5400
The ASX 200 VIX rose sharply, but (below 20) continues to reflect low market risk.
The Australian Dollar is declining after breaking primary support at $0.885, offering a long-term target of 80 cents*. Exporters and import replacement industries on the ASX will benefit from the weaker Aussie Dollar in the long-term, but the short-term impact is negative, with overseas investors retreating from the market.
* Target calculation: 0.885 – ( 0.97 – 0.885 ) = 0.80
The ASX 200 is heading for a test of support at 5200. Breach is likely and would signal a test of primary support at 5000. Declining 13-week Twiggs Money Flow indicates selling pressure. Recovery above 5400 is unlikely in the short-term, but would signal a primary advance, with a long-term target of 5800*.
* Target calculation: 5400 + ( 5400 – 5000 ) = 5800
The ASX 200 is testing short-term resistance at 5300. Rising 21-day Twiggs Money Flow suggests buying pressure, but the latest hanging man candlestick is bearish. Follow-through above 5320 would indicate an advance to 5400*, while reversal below 5200 would test primary support at 5050.
* Target calculation: 5300 + ( 5300 – 5200 ) = 5400
The ASX 200 VIX below 20 continues to reflect low market risk.
The ASX 200 found short-term support at 5200. Recovery above 5400 would signal another advance, but failure is more likely and would indicate another test of primary support at 5000. Declining 13-week Twiggs Money Flow warns of medium-term selling pressure.
* Target calculation: 5450 + ( 5450 – 5050 ) = 5850
The ASX 200 VIX below 20, however, continues to reflect low market risk.
The ASX 200 retracement is testing support at 5300. Rising 21-day Twiggs Money Flow indicates medium-term buying pressure. Recovery above 5380 would suggest an advance to 5850*. A declining Shanghai Composite could impact on the resources sector. Reversal below the October 2013 low of 5150 is not likely, but would be cause for concern.
* Target calculation: 5450 + ( 5450 – 5050 ) = 5850
The S&P 500 broke resistance at 1810, signaling an advance to 1910*. Troughs high above zero on 13-week Twiggs Money Flow indicate strong buying pressure.
* Target calculation: 1810 + ( 1810 – 1710 ) = 1910
The FTSE 100 completed its correction with a break above the descending trendline. Troughs above zero on 13-week Twiggs Money Flow indicate buying pressure. Breakout above 6800 would offer a target of 7200*, but expect strong resistance at the 1999 high of 6950/7000.
* Target calculation: 6800 + ( 6800 – 6400 ) = 7200
The Dow Jones Euro Stoxx 50 broke resistance at 3100, signaling an advance to 3350*. Troughs above zero on 13-week Twiggs Momentum indicate a healthy up-trend. Retracement to test the new support level is likely; respect would strengthen the bull signal.
* Target calculation: 3100 + ( 3100 – 2850 ) = 3350
Germany’s DAX similarly broke resistance at 9400, offering a target of 10200*. Troughs high above zero on 13-week Twiggs Money Flow indicate strong buying pressure.
* Target calculation: 9400 + ( 9400 – 8600 ) = 10200
India’s SENSEX is testing resistance at 21200 after a correction that respected support at 20200. Breakout would signal an advance to 22200*. A 13-week Twiggs Money Flow trough above zero would indicate buying pressure and a healthy up-trend.
* Target calculation: 21200 + ( 21200 – 20200 ) = 22200
Japan’s Nikkei 225 broke resistance at 16000, supported by a strong rise in the Dollar/Yen exchange rate. Breakout signals a primary advance with a long-term target of 19000*. Completion of a 13-week Twiggs Money Flow trough above zero suggests buying pressure and a healthy up-trend.
* Target calculation: 16000 + ( 16000- 13000 ) = 19000
A single cloud on the horizon, the Shanghai Composite Index is testing primary support at 2080. Failure of support would signal a primary down-trend with an immediate target of 1900*. Bearish divergence on 21-day Twiggs Money Flow indicates medium-term selling pressure, but recovery above zero would suggest support.
* Target calculation: 2080 – ( 2260 – 2080 ) = 1900
The ASX 200 is lagging other markets because of negative influence from China. Bearish divergence on 13-week Twiggs Money Flow indicates selling pressure. Respect of resistance at 5450 would be cause for concern if followed by reversal below 5300. Breakout above 5450 and completion of a trough above zero on 13-week Twiggs Money Flow, however, would signal another primary advance, with a target of 5900*.
* Target calculation: 5450 + ( 5450 – 5000 ) = 5900
This discussion on SBS Insight from April 24th, 2012 covers the Australian manufacturing dilemna:
There are three major costs in manufacturing: material costs, labor costs and other operating expenses. Roughly equal in size. Material costs are roughly the same, whether you are in Australia or China. Labor costs are radically different, with labor costs of $15 compared to $1 in China. But Australia also can’t compete on other operating expenses, which are far higher because of the labor cost and related benefits…….I can’t see why Australia hasn’t got the sense to turn around. We have been on this path for 30 years…
~ Peter Rodeck, Australian manufacturer EnvironData.
