Category: Japan & Korea

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Asia: China buying pressure but HK retreats

Japan’s Nikkei 225 is retracing to test its new support level around 15000. 21-Day Twiggs Money Flow holding above zero indicates buying pressure. Respect of support would confirm a primary advance, with a long-term target of 17500*. Reversal below the rising trendline is unlikely, but would warn of a correction to the base of the formation at 12500.

Nikkei 225

* Target calculation: 15000 + ( 15000 – 12500 ) = 17500

China’s Shanghai Composite is testing resistance at 2250. Breakout would signal a primary advance to 2450. 21-Day Twiggs Money Flow holding above zero indicates buying pressure. Reversal below the rising trendline is unlikely, but would warn of trend weakness.

Shanghai Composite Index

Hong Kong’s Hang Seng index retreated from resistance at 24000. Expect short-term support at 23500. Bearish divergence on 21-day Twiggs Money Flow warns of selling pressure. Breach of the rising trendline would warn of a correction. Breakout above 24000 is less likely, but would signal a primary advance to 24500, with a long-term target of 25500*.

Hang Seng Index

* Target calculation: 23500 + ( 23500 – 21500 ) = 25500

India’s Sensex also warns of selling pressure, with a bearish divergence on 21-day Twiggs Money Flow. Respect of resistance at 21000/21200 would strengthen the warning. And reversal below 20200 would signal a correction. Breakout above 21200 is less likely, but would confirm the primary advance, offering a target of 24000*.

Sensex

* Target calculation: 21000 + ( 21000 – 18000 ) = 24000

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Forex: Dollar and Sterling strengthen

The Euro is rallying for another test of resistance at $1.37 after finding support at $1.3350 against the greenback. Troughs above zero on 13-week Twiggs Momentum suggest a healthy up-trend. Breakout above $1.37 would signal an advance to $1.40*. Respect of resistance, indicated by reversal below the secondary rising trendline, would, however, warn of a correction to the primary trendline at $1.31.

Euro/USD

* Target calculation: 1.37 + ( 1.37 – 1.34 ) = 1.40

Sterling breakout above resistance at €1.20 signals a primary up-trend. Recovery of 13-week Twiggs Momentum above zero strengthens the signal. Target for the advance is €1.23*. Reversal below €1.19 is unlikely, but would warn of another test of €1.1650.

Sterling/Euro

* Target calculation: 1.20 + ( 1.20 – 1.17 ) = 1.23

The Greenback is likely to retrace to test the new support level at ¥101 Japanese Yen. Respect would confirm an advance with a target of ¥108*. The trough above zero on 13-week Twiggs Momentum strengthens the signal. Reversal below ¥101 is unlikely, penetration of the rising trendline warning of trend weakness.

USD/JPY

* Target calculation: 1.01 + ( 1.01 – 0.94 ) = 1.08

Canada’s Loonie broke primary support at $0.94, signaling another decline with a target of $0.915*. A peak below zero on 13-week Twiggs Momentum strengthens the signal. Recovery above $0.945 is unlikely, but would warn of a bear trap.

Canadian Loonie

* Target calculation: 0.945 – ( 0.975 – 0.945 ) = 0.915

The Aussie Dollar is heading for a test of primary support at $0.89. The peak below zero on 13-week Twiggs Momentum signals continuation of the down-trend. Breakout below $0.89 would offer a long-term target of $0.81*, while respect of support would suggest a rally to $0.93. The RBA needs a weaker Aussie Dollar, without lowering interest rates, and will do all it can to assist the decline.

Aussie Dollar

* Target calculation: 0.89 – ( 0.97 – 0.89 ) = 0.81

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ASX correction despite Asian bulls

Japan’s Nikkei 225 is likely to retrace to test its new support level at 15000. Respect would negate the bearish divergence on 13-week Twiggs Money Flow and confirm the long-term target of 17500*. Reversal below the rising trendline, however, would warn of a correction to 13000.

Nikkei 225

* Target calculation: 15000 + ( 15000 – 12500 ) = 17500

China’s Shanghai Composite is consolidating between 2100 and 2250. Upward breakout would suggest a test of the descending trendline at 2450 on the monthly chart. Momentum remains weak and reversal below 2100 is as likely, which would test primary support at 1950.

Shanghai Composite Index

Hong Kong’s Hang Seng is testing this year’s high of 24000. Rising 13-week Twiggs Money Flow indicates medium-term buying pressure. Breakout above 24000 is likely and would signal a primary advance to 24500, with a long-term target of 25500*. Reversal below 23500 is unlikely, but would warn of another test of 22500.

Hang Seng Index

* Target calculation: 23500 + ( 23500 – 21500 ) = 25500

India’s Sensex is headed for a test of 21200 after respecting support at 20200. Breakout above its 2007/2010 highs at 21000 would confirm the primary advance, offering a target of 24000*. Another 13-week Twiggs Money Flow trough above zero would strengthen the signal. Reversal below 20200 is unlikely, but would warn of a correction to primary support at 18000.

Sensex

* Target calculation: 21000 + ( 21000 – 18000 ) = 24000

The ASX 200 is undergoing a correction after breaching the rising trendline and support at 5290/5300. Bearish divergence on 13-week Twiggs Money Flow warns of selling pressure, but a trough above zero would indicate a healthy (primary) up-trend. There are plenty of support levels evident on the chart, but I would expect strongest support around 4900 and the 2009/2011 highs of 5000.

ASX 200

The ASX 200 VIX index, below 15, continues to indicate low market risk.

ASX 200

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Muted ASX response to Asian bulls

Japan’s Nikkei 225 is likely to retrace to test its new support level at 15000. Respect would negate the bearish divergence on 13-week Twiggs Money Flow and confirm the long-term target of 17500*. Reversal below the rising trendline, however, would warn of a correction to 12500/13000.

Nikkei 225

* Target calculation: 15000 + ( 15000 – 12500 ) = 17500

Narrow consolidation at China’s Shanghai Composite upper trend channel suggests continuation of the rally. Follow-through above 2210 would signal a test of 2270. Reversal below 2180 is less likely, but would indicate a down-swing to the lower channel. The 21-day Twiggs Money Flow trough above zero suggests medium-term buying pressure. Breakout above 2270 would signal a primary up-trend.

Shanghai Composite Index

Hong Kong’s Hang Seng is likely to retrace to test the new support level at 23500. Respect would confirm an advance to 25500*, signaling a primary up-trend. Follow-through above 24000 would confirm. Rising 13-week Twiggs Money Flow indicates medium-term buying pressure. Reversal below 23500 is unlikely, but would warn of another test of 22500.

Hang Seng Index

* Target calculation: 23500 + ( 23500 – 21500 ) = 25500

India’s Sensex is again rallying after testing support at 20200. Breakout above its 2007/2010 highs at 21000 would confirm the primary advance, offering a target of 24000*. Another 13-week Twiggs Money Flow trough above zero would strengthen the signal. Reversal below 20200 is unlikely, but would warn of a correction to the rising trendline and primary support at 18000.

Sensex

* Target calculation: 21000 + ( 21000 – 18000 ) = 24000

Singapore’s Straits Times Index is struggling with resistance at 3250/3300. 13-Week Twiggs Money Flow below zero continues to warn of selling pressure. Breakout above 3300 is unlikely at present, but would signal a primary advance to 3600*. Reversal below 3120 would warn of another correction to primary support at 3000.

Straits Times Index

* Target calculation: 3300 + ( 3300 – 3000 ) = 3600

The ASX 200 continues to encounter selling pressure, with 21-day Twiggs Money Flow below zero. Reversal below the rising trendline and short-term support at 5290 would signal a correction. Breakout above 5400 is less likely, but would suggest an advance to 5600*. Follow-through above 5450 would confirm.

ASX 200

* Target calculation: 5450 + ( 5450 – 5300 ) = 5600

Readings on the ASX 200 VIX index are more bullish, suggesting relatively low market risk.

ASX 200

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Stronger dollar drives Euro & Aussie lower

The Euro continues to test support at $1.3350 against the greenback after a false break above the February high of $1.37. Breach of support would warn of a bull trap, and follow-through below $1.31 and the rising trendline would signal a reversal. 13-Week Twiggs Momentum, however, continues to indicate a primary up-trend; a trough above zero would strengthen the signal. Recovery above $1.37 is less likely, but would signal a fresh advance.

Euro/USD

* Target calculation: 1.38 + ( 1.38 – 1.34 ) = 1.42

Sterling is testing resistance at €1.20. Recovery of 13-week Twiggs Momentum above zero suggests an up-trend. Breakout above €1.20 would signal an advance to €1.23*. Respect of resistance is unlikely, but would suggest another test of €1.1650.

Sterling/Euro

* Target calculation: 1.20 + ( 1.20 – 1.17 ) = 1.23

The Greenback is headed for another test of resistance at ¥101. The bullish ascending triangle suggests an upward breakout with a target of ¥108. Breakout above ¥101 would confirm. 13-Week Twiggs Momentum descended steeply over the length of the consolidation, but completion of a trough above zero (recovery above say 5%) would indicate a primary up-trend. Reversal below support at ¥96 is now unlikely.

USD/JPY

* Target calculation: 1.01 + ( 1.01 – 0.94 ) = 1.08

Recovery of Canada’s Loonie above $0.96 would complete a second higher trough against its US neighbor. Breakout above $0.9750 would signal a primary up-trend, but breach of primary support at $0.9450 is as likely and would signal continuation of the primary down-trend. Another 13-week Twiggs Momentum peak below zero would also indicate a down-trend.

Canadian Loonie

The Aussie Dollar is testing medium-term support at $0.93*. Respect of the zero line by 63-day Twiggs Momentum suggests continuation of the down-trend. Breach of support at $0.93 would confirm, signaling a test of primary support at $0.89. Recovery above $0.9450 is less likely, but would a rally to $0.9750. The RBA needs a weaker Aussie Dollar, without lowering interest rates, and will do all it can to assist the decline.

Aussie Dollar

* Target calculation: 0.975 + ( 0.975 – 0.95 ) = 1.00

The Aussie continues to test support at $1.12 against its Kiwi neighbor. Rising Momentum suggests another rally to $1.16, confirmed if resistance at $1.14 is broken. But breakout below $1.12 would signal a decline to $1.08*. Breakout above $1.16 would complete a triple-bottom reversal with a target of $1.20*.

Kiwi Dollar

* Target calculations: 1.12 – ( 1.16 – 1.12 ) = 1.08 OR 1.16 + ( 1.16 – 1.12 ) = 1.20

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Asia rallies while ASX smoulders

India’s Sensex found support at 20200 before rallying to test resistance at 21200. Breakout above its 2007 and 2010 highs at 21000 would confirm the primary advance, offering a target of 24000*. Rising 13-week Twiggs Money Flow suggests medium-term buying pressure. Reversal below 20200 is unlikely, but would warn of a correction to primary support at 18000.

Sensex

* Target calculation: 21000 + ( 21000 – 18000 ) = 24000

Japan’s Nikkei 225 broke through resistance at 15000, but bearish divergence on 13-week Twiggs Money Flow warns of selling pressure. Expect retracement to test the new support level. Respect of 15000 is unlikely, but would confirm the primary up-trend, with a long-term target of 17500*. Reversal below the rising trendline would test primary support at 13200, warning of trend weakness.

Nikkei 225

* Target calculation: 15000 + ( 15000 – 12500 ) = 17500

Singapore’s Straits Times Index respected support at 3000 on the monthly chart, but is struggling to make an impression on long-term resistance at 3300. 13-Week Twiggs Momentum below zero continues to warn of a primary down-trend. Breakout above 3300 is unlikely at present, but would signal a primary advance to 3600*.

Straits Times Index

* Target calculation: 3300 + ( 3300 – 3000 ) = 3600

China’s Shanghai Composite is testing resistance at its upper trend channel. Follow-through above 2200 would indicate the correction is over and a test of 2270 is likely. A down-swing to test the lower channel is just as likely, however, and would indicate continuation of the correction. Completion of a 21-day Twiggs Money Flow trough above zero (say > 15%) would signal medium-term buying pressure. Breakout above 2270 may be some way off but would signal a primary up-trend.

Shanghai Composite Index

Hong Kong’s Hang Seng broke resistance at 23500, signaling a primary up-trend. Follow-through above 24000 would confirm, offering a medium-term target of 24500 and a long-term target of 28000*. Rising 13-week Twiggs Money Flow indicates medium-term buying pressure. Reversal below 23500 is unlikely, but would warn of another test of 22500 or the primary trendline.

Hang Seng Index

* Target calculation: 24000 + ( 24000 – 20000 ) = 28000

The ASX 200 is testing medium-term support at 5300. Penetration of the rising trendline, would warn of a correction. Bearish divergence on 21-day Twiggs Money Flow suggests selling pressure.

ASX 200

The monthly chart shows a correction would be likely to test the secondary rising trendline around 5000. Recovery above 5400 is unlikely at present, but would signal an advance to 5600*.

ASX 200

* Target calculation: 5450 + ( 5450 – 5300 ) = 5600

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ASX at resistance as Asia consolidates

India’s Sensex retreated from its 2007 and 2010 highs at 21000 and is testing support at 20500. Respect would signal a primary advance with a target of 24000*. Rising 13-week Twiggs Money Flow suggests medium-term buying pressure. Reversal below 20500 is less likely, but would warn of a correction to 19500 and possibly primary support at 18000.

Sensex

* Target calculation: 21000 + ( 21000 – 18000 ) = 24000

Dow Jones Japan index is proving resilient, headed for another test of resistance at 82. Breakout would signal an advance to 90*. 13-Week Twiggs Momentum is declining, but has so far respected the zero line, suggesting the primary up-trend is intact. Completion of a trough above zero would strengthen the signal. Reversal below the rising trendline is unlikely but would warn of another test of primary support at 74.

Dow Jones Japan index

* Target calculation: 82 + ( 82 – 74 ) = 90

Dow Jones Shanghai Index is rallying to test resistance at 282 after finding support at 270. Respect of resistance is likely and breach of 270 would signal a test of primary support at 245/250. Twiggs Momentum oscillating around the zero line indicates uncertainty.

DJ Shanghai Index

The ASX 200 is consolidating in a narrow range below resistance at 5450 — a bullish sign. Upward breakout would signal an advance to 5600*. Bearish divergence on 13-week Twiggs Money Flow, however, continues to warn of selling pressure. Reversal below 5300, penetrating the rising trendline, would signal a correction.

ASX 200

* Target calculation: 5450 + ( 5450 – 5300 ) = 5600

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Asia: India breaks out, ASX near target

India’s Sensex broke out above its 2007 and 2010 highs at 21000. Expect retracement to test the new support level. Respect would signal a primary advance with a target of 24000*. Rising 13-week Twiggs Money Flow suggests medium-term buying pressure. Reversal below 20500 is unlikely, but would warn of a correction to primary support at 18000.

Sensex

* Target calculation: 21000 + ( 21000 – 18000 ) = 24000

Japan’s Nikkei 225 again respected resistance at 15000. Declining 13-week Twiggs Money Flow suggests medium-term selling pressure. Breakout above 15000 would signal an advance to 17500*, but reversal below the October low is more likely and would test primary support at 13200, penetration of the rising trendline warning of trend weakness.

Nikkei 225

* Target calculation: 15000 + ( 15000 – 12500 ) = 17500

Singapore’s Straits Times Index is heading for another test of long-term resistance at 3300. Breakout would signal a primary advance to 3600*. But 13-week Twiggs Momentum below zero warns of a primary down-trend and reversal below the rising trendline would strengthen the signal. Breach of support at 3000 would confirm a primary down-trend.

Straits Times Index

* Target calculation: 3300 + ( 3300 – 3000 ) = 3600

China’s Shanghai Composite is consolidating below resistance at 2150/2160. Breakout below 2100 would signal a correction to primary support at 1950, while recovery above the upper trend channel at 2200 would suggest another advance; follow-through above 2250 confirming a primary up-trend. Declining 21-day Twiggs Money Flow indicates medium-term selling pressure, but respect of the zero line would suggest long-term support.

Shanghai Composite Index

Hong Kong’s Hang Seng is again testing resistance at 23500 on the weekly chart. Breakout would signal a primary advance, with a medium-term target of 24500 and a long-term target of 28000*. Follow-through above 24000 would confirm. Rising 13-week Twiggs Money Flow suggests medium-term buying pressure; a trough above zero would strengthen the signal. Reversal below 22500 is unlikely, but would warn of a correction to 21500 or the primary trendline.

Hang Seng Index

* Target calculation: 24000 + ( 24000 – 20000 ) = 28000

The ASX 200 found short-term support at 5390, short retracement suggesting buying pressure. Penetration of the descending trendline on 21-day Twiggs Money Flow, after a mild bearish divergence, would confirm this. Breakout above 5450 would test 5500, exceeding the target for the current advance. Respect of resistance remains as likely, however, and would warn of a correction to 5250/5300; confirmed if support at 5390 is broken. In the longer term, another Twiggs Money Flow trough above zero would suggest a healthy primary up-trend.

ASX 200

* Target calculation: 5300 + ( 5300 – 5150 ) = 5450

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Forex: Euro & Aussie test support

The Euro is retracing to test the new support level at its February high of $1.37. Respect of the rising trendline would confirm a long-term advance to $1.46*. Troughs above zero on 13-week Twiggs Momentum indicate a healthy up-trend. Reversal below the trendline is unlikely, but would warn of a correction to the primary trendline and support at $1.31.

Euro/USD

* Target calculation: 1.37 + ( 1.37 – 1.28 ) = 1.46

Sterling broke medium-term support at €1.175, signaling a correction to test primary support at €1.14. Reversal of 13-week Twiggs Momentum below zero strengthens the warning. Recovery above resistance at €1.19 is unlikely, but would suggest an advance to €1.24*.

Sterling/Euro

* Target calculation: 1.19 + ( 1.19 – 1.14 ) = 1.24

A higher trough on the Greenback against the Yen suggests buying pressure. Breakout above ¥99 would strengthen the signal, offering a target of ¥101. 21-Day Twiggs Momentum appears to have leveled out and a trough above zero would indicate a primary up-trend. Reversal below support at ¥97 is unlikely, but would test primary support at ¥96.

USD/JPY

Canada’s Loonie retreated below support at $0.96 against its US neighbor. Breach of primary support at $0.9450 would signal continuation of the primary down-trend, as would another 13-week Twiggs Momentum peak below zero. Recovery above $0.96 is unlikely, but would warn of a trend reversal.

Canadian Loonie

The Aussie Dollar retraced to test medium-term support at $0.95* against the Greenback. Recovery above $0.9550 is likely and would indicate a test of parity*. Two doji candles suggest support and follow-through below $0.9450 is unlikely, indicating a fall to $0.93.

Aussie Dollar

* Target calculation: 0.975 + ( 0.975 – 0.95 ) = 1.00

The Aussie encountered resistance at $1.16 against its Kiwi neighbour, suggesting a test of medium-term support at $1.14. Respect of $1.14 would be bullish and breakout above $1.16 would complete a double-bottom reversal with a target of $1.20*. Failure of $1.14 is now unlikely, but would threaten primary support at $1.12.

Kiwi Dollar

* Target calculations: 1.16 + ( 1.16 – 1.12 ) = 1.20

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Shanghai weakens, ASX unaffected

China’s Shanghai Composite index broke support at 2150, signaling a correction to test primary support at 1950. Declining 13-week Twiggs Money Flow indicates selling pressure. Follow-through below 2100 would confirm. Recovery above 2150 is less likely, but would suggest a bear trap.

Shanghai Composite Index

Japan’s Nikkei 225 respected resistance at 15000. Declining 13-week Twiggs Money Flow suggests medium-term selling pressure. Monday has so far posted gains and breakout above 15000 would signal an advance to 17500*, but reversal below the October low is as likely and would test primary support at 13200. Penetration of the rising trendline would warn of trend weakness.

Nikkei 225

* Target calculation: 15000 + ( 15000 – 12500 ) = 17500

India’s Sensex respected its 2007 and 2010 highs at 21000, retracing to test support at 20500. Rising 13-week Twiggs Money Flow indicates buying pressure and breakout above 21000 would offer a long-term target of 24000*. Reversal below 20500 is unlikely, but would warn of another test of primary support at 18000.

Sensex

* Target calculation: 21000 + ( 21000 – 18000 ) = 24000

The ASX 200 posted a strong blue candle on Monday, but mild bearish divergence on 21-day Twiggs Money Flow warns the index is nearing its target and is due for retracement to test support at 5250/5300. In the longer term, however, troughs above zero reflect a healthy primary up-trend.

ASX 200

* Target calculation: 5300 + ( 5300 – 5150 ) = 5450

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