China & HK Archives - Page 35 of 61

September 23, 2013

Learning economic lessons from Asia | The Enlightened Economist

The Enlightened Economist reviews Joe Studwell’s book, How Asia Works: Success and Failure in the World’s Most Dynamic Region. He highlights three key steps:

land reform, where large plantations are broken into smaller — and surprisingly more productive — family-owned farms;
export subsidy of key domestic manufacturing industry, rather than protectionism through creating barriers to imports; and
control of large-scale, high-end financial services while extending the scale of low-end consumer and small-business finance.

September 16, 2013

Asian markets and ASX cautious

Japan’s Nikkei 225 Index broke its descending trendline, indicating the correction is over. Breakout above 15000 would signal a primary advance to 18000*. Recovery of 13-week Twiggs Money Flow above 30% would support this. Reversal below 13000 is now unlikely.

Nikkei 225 Index

China’s Shanghai Composite breached its descending trendline at 2200, indicating the down-trend is over. A long wick (or shadow) on last week’s candle, however, suggests resistance — and reversal below 2150 and the rising trendline would warn of a bull trap. But rising 13-week Twiggs Money Flow continues to signal medium-term buying pressure. Follow-through above 2350 is likely, and would indicate a test of 2450.

Shanghai Composite Index

India’s Sensex also displays a long wick on last week’s candle. Expect strong resistance at 20500. Respect would indicate another test of primary support at 18000. Rising 13-week Twiggs Money Flow indicates medium-term buying pressure, but long-term direction is unclear.

BSE Sensex Index

The ASX 200 is cautiously testing long-term resistance at 5250. Europe is bullish and Asian markets are rising, but the Dow and S&P 500 remain mildly bearish. Respect of resistance at 5250, indicated by reversal below 5150 and the rising trendline, would present another bearish divergence on 13-week Twiggs Money Flow, indicating long-term selling pressure. Breakout above 5250, however, would signal another primary advance, with a long-term target of 5750*.

ASX 200 Index

* Target calculation: 5250 + ( 5250 – 4750 ) = 5750

September 12, 2013

US & China lift ASX

The S&P 500 rallied strongly this week despite a weak bearish divergence on 13-week Twiggs Money Flow warning of selling pressure. Recovery above 1700 would indicate another advance, while a new August high on Twiggs Money Flow would further strengthen the signal, offering a target of 1850*. Reversal below 1630 is unlikely, but would re-test primary support at 1560.

S&P 500 Index

* Target calculation: 1700 + ( 1700 – 1550 ) = 1850

Dow Jones Industrial Average displayed a stronger bearish divergence on 13-week Twiggs Money Flow, increasing the likelihood of reversal below 14800. But positive sentiment is growing and recovery above 15650 now seems as likely.
S&P 500 Index

China’s Shanghai Composite penetrated resistance at 2200 and the descending trendline, suggesting that the down-trend is ending. Reversal below the rising trendline would warn of another correction to test primary support at 1950, but breach of support is now less likely. Rising 13-week Twiggs Money Flow indicates medium-term buying pressure; a trough above zero would strengthen the signal.

Shanghai Composite Index

The ASX 200 is testing resistance at 5250, buoyed by positive sentiment in China and the US. Breakout would suggest a primary advance, but a lower peak on 13-week Twiggs Money Flow would continue to warn of selling pressure. Reversal below 5150 remains as likely, and would test medium-term support at 4900/5000.

ASX 200 Index

* Target calculation: 5250 + ( 5250 – 4750 ) = 5750

September 9, 2013

Asian markets lift the ASX 200

Dow Jones Japan Index jumped today on Tokyo’s success in its bid for the 2020 Olympics. Follow-through above the descending trendline indicates the correction is over and a test of 81.50 likely. Upward breakout would signal continuation of the primary up-trend. Reversal below 73.50 is unlikely, but would warn of a test of primary support at 69.00.

Dow Jones Japan Index

China’s Shanghai Composite breached resistance at 2100, indicating a test of the descending trendline at 2200. Rising 13-week Twiggs Money Flow suggests medium-term buying pressure. The primary trend remains down, however, and reversal below the rising trendline would warn of another test of primary support at 1950. In the longer-term, breakout above the descending trendline is unlikely, but would suggest that the down-trend has ended.

Shanghai Composite Index

India’s Sensex rallied sharply after finding support at 18000/18500. Follow-through above 19500 would confirm another test of resistance at 20500. Rising 13-week Twiggs Money Flow indicates medium-term buying pressure. Reversal below 18500 is unlikely, but would signal a primary down-trend.

BSE Sensex Index

Rising Asian markets, especially China, are lifting the ASX 200, but weakness on the Dow or S&P 500 could reverse this. Recovery above 5150 and respect of the rising trendline suggest another test of resistance at 5250. Rising 21-day Twiggs Money Flow indicates short/medium-term buying pressure. Breakout above 5250 would signal another primary advance. Respect of resistance remains as likely, however, and reversal below 5000 would warn of another test of primary support at 4650.

ASX 200 Index

* Target calculation: 5250 + ( 5250 – 4650 ) = 5850

September 4, 2013

The BRICs party is over | Anders Aslund | Vox

Anders Åslund:

From 2000 to 2008 the world went through one of the greatest commodity and credit booms of all times. Goldman Sachs preached that the BRICs were unstoppable….

However, Genesis warns that after seven years of plenty, “seven years of famine will come and the famine will ravage the land”. Genesis appears to have described the combined commodity and credit cycle, from which the Brazil, Russia, India and China have benefited more than their due….

Read more at The BRICs party is over | vox.

September 3, 2013

Global markets bearish but ASX, India find support

US markets are closed for Labor Day. The S&P 500 ended last week testing its rising trendline and support at 1630. Breach would reinforce the bearish divergence on 21-day Twiggs Money Flow, indicating a test of primary support at 1560. Recovery above the descending trendline is unlikely at present, but would warn the correction is ending. In the long-term, failure of primary support would offer a target of 1400*.

S&P 500 Index

* Target calculation: 1550 – ( 1700 – 1550 ) = 1400

VIX below 20 suggests a bull market.
S&P 500 Index

The FTSE 100 closed above initial resistance at 6500. Follow-through would suggest the correction is over and another attempt at 6750 likely. Strong bearish divergence on 13-week Twiggs Money Flow, however, warns of selling pressure and breakout above 6750 is unlikely. Reversal below 6400 would warn of a test of primary support at 6000.

FTSE 100 Index

Germany’s DAX encountered stubborn resistance at 8500. Reversal below 8000 would test primary support at 7600, while breakout above 8500 would offer a target of 9000*.

DAX Index

* Target calculation: 8400 + ( 8400 – 7800 ) = 9000

Japan’s Nikkei 225 recovered above 13500 and follow-through above the descending trendline would suggest the correction is over and another test of resistance at 15000 is likely. Reversal below 13200, however, would indicate a test of primary support at 12500. Earlier bearish divergence on 13-week Twiggs Money Flow warns of long-term selling pressure.

Nikkei 225 Index

China’s Shanghai Composite is testing resistance at 2100/2120. Bearish divergence on 13-week Twiggs Money Flow warns of selling pressure. Reversal below 2050 would indicate another test of primary support at 1950. Breakout above 2200 and the descending trendline is unlikely, but would suggest that the down-trend is ending.

Shanghai Composite Index

India’s Sensex encountered strong support at 18000/18500, evidenced by the long tails on the weekly candles and rising 13-week Twiggs Money Flow. Expect another test of resistance at 20500. Follow-through above 19000 would strengthen the signal.

BSE Sensex Index

The ASX 200 is headed for a test of 5250 after breaking resistance at 5150. Rising 13-week Twiggs Money Flow indicates medium-term buying pressure. Breakout above 5250 would be a welcome sign, suggesting another primary advance, but respect of resistance and a lower peak on Twiggs Money Flow would warn of a reversal.

ASX 200 Index

* Target calculation: 5250 + ( 5250 – 4750 ) = 5750

August 28, 2013

Commodities rise as the Dollar falls

Dollar Index

The Dollar Index is testing primary support at 80.50. Bearish divergence on weekly Twiggs Momentum warns of a primary down-trend and breach of support at 80.50 would confirm. Respect of support and recovery above 82, however, would indicate an up-swing to 84.50.

Crude Oil

Nymex WTI light crude broke resistance at $108/barrel, as the Syrian conflict threatens to escalate. Expect an advance to $118/barrel*. Reversal below $108 is most unlikely, but would signal another test of the rising trendline. Brent crude similarly broke through $110, offering a target of $120.

Brent Crude and Nymex Crude

* Target calculation: 108 + ( 108 – 98 ) = 118

Commodities

Copper is headed for a test of $7500/tonne. Respect of resistance would indicate another test of long-term support at $6600/$6800. Upward breakout and penetration of the descending trendline would suggest the primary down-trend is ending, while breach of support at $6600 would signal continuation. Momentum oscillating mainly below zero still favors a down-trend.
Dow Jones UBS Commodities Index
The Shanghai Composite Index bear rally continues, causing a lift in commodity prices. Dow Jones-UBS Commodity Index completed a double-bottom reversal, with breakout above 130, offering a target of 135*. Penetration of the descending trendline also suggests the primary down-trend has ended.

Dow Jones UBS Commodities Index

* Target calculation: 130 + ( 130 – 125 ) = 135

Be cautious, however, as the Shanghai Composite faces resistance at 2150. Reversal below the rising trendline would warn of another primary down-swing; confirmed if support at 1950 is breached.
Dow Jones UBS Commodities Index

August 22, 2013

Global selling pressure

The S&P 500 Index broke medium-term support at 1650 and is headed for a test of the rising trendline. Respect would indicate the primary up-trend is intact, but bearish divergence on 13-week Twiggs Money Flow warns of selling pressure. This is also evidenced by the marginal new high in August. A test of primary support at 1560 is likely. Breach would offer a target of 1400*.

S&P 500 Index

* Target calculation: 1550 – ( 1700 – 1550 ) = 1400

Dow Jones Europe Index also displays marginal new highs in May and August. Penetration of the rising trendline indicates the up-trend is losing momentum — also indicated by bearish divergence on 13-week Twiggs Momentum. Reversal below support at 290 would strengthen the warning, but only failure of support at 270 would signal a trend reversal.

DJ Europe Index

China’s Shanghai Composite Index ran into strong resistance at 2100. Declining 13-week Twiggs Money Flow (below zero) warns of selling pressure. Reversal below 2050 would indicate another test of primary support at 1950, suggesting a decline to 1800*. Breakout above 2200 and the descending trendline is unlikely, but would signal that a bottom has formed.

Shanghai Composite Index

Japan’s Nikkei 225 broke medium-term support at 13500. Follow-through below 13250 would indicate a correction to primary support at 12500. Penetration of the rising trendline suggests that the primary up-trend is losing momentum. Earlier bearish divergence on 13-week Twiggs Money Flow also warns of a reversal. Recovery above the declining trendline is less likely, but would indicate the correction has ended.

Nikkei 225 Index

India’s Sensex broke primary support at 18500, following through below 18000 to remove any doubt. The primary trend has reversed after a triple top and now offers a target of 16500*. Declining 13-week Twiggs Money Flow confirms selling pressure. Recovery above 18500 is unlikely, but would warn of a bear trap.

BSE Sensex Index

* Target calculation: 18500 – ( 20500 – 18500 ) = 16500

The ASX 200 is consolidating in a broadening top around the 2010/2011 high of 5000. Correction to 4900 would be quite acceptable, garnering support for an advance to the upper border, but breach of 4900 would indicate a failed swing, warning of reversal to a primary down-trend. Failure of primary support at 4650 would confirm. Bearish divergence on 13-week Twiggs Money Flow indicates selling pressure; strengthened if the indicator reverses below zero. Respect of support at 5000 is less likely, despite the long tail on today’s candle, but would offer a target of 5300*.

ASX 200 Index

* Target calculation: 5150 + ( 5150 – 5000 ) = 5300

August 13, 2013

China rally spurs ASX advance

China’s Shanghai Composite Index rallied from support at 1950 to test medium-term resistance at 2100 on the weekly chart. Breakout would indicate a test of the descending trendline at 2200. The primary trend is down, but penetration of the trendline would suggest that a bottom has formed.

Shanghai Composite Index

The Shenzhen Composite Index has been in a primary up-trend since May, but displayed weakness with a second, shaky test of support at 900. Troughs above zero on 13-week Twiggs Money Flow indicate the primary up-trend is intact. Breakout above the last high at 1040 would confirm — a bullish sign for the Shanghai Composite.

Shenzhen Composite Index

Japan’s Nikkei 225 is testing medium-term support at 13500. Breach would indicate a correction to primary support at 12500, but respect of the zero line by 21-day Twiggs Money Flow would suggest the primary up-trend is intact. Recovery above 14500 would strengthen the signal.

Nikkei 225 Index

India’s Sensex respected primary support at 18500. Rising troughs on 13-week Twiggs Money Flow indicate moderate buying pressure. Expect another test of resistance at 20500 (i.e. a test of 20500 is likely). Breach of support, while unlikely, would warn of a primary down-trend — confirmed if there is follow-through below 18000.

BSE Sensex Index

* Target calculation: 20000 + ( 20000 – 18000 ) = 22000

The ASX 200 broke short-term resistance at 5120, signaling an advance to the May peak at 5250. Rising 21-day Twiggs Money Flow indicates buying pressure. Reversal below 5000 is unlikely, but would warn of a correction to at least 4850.

ASX 200 Index

Breakout above 5250 would indicate another advance, but high volatility, shown by the broadening formation of the last few months, will require further evidence to confirm this.

ASX 200 Index

* Target calculation: 5250 + ( 5250 – 4650 ) = 5850

August 12, 2013

China ‘hard landing’ could trigger Australia recession: Standard & Poor – The Economic Times

“Australia’s exposure to commodity demand from Asia, and China in particular, was a saving grace during the global recession of 2009. But by the same token it has become Australia’s Achilles’ heel,” the ratings giant [Standard & Poor’s] said.

“Particularly while mining investment remains such a large share of the Australian economy, and other sectors continue to lack growth momentum, Australia remains highly sensitive to a sharp correction in China’s economic growth.”