Category: Japan & Korea

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Asia: China & Japan weak, India & HK bullish

China’s Shanghai Composite Index respected resistance at 2150 and the descending trendline, indicating another down-swing. Breach of support at 2000 would confirm. Reversal of 63-day Twiggs Momentum below its rising trendline would strengthen the bear signal.

Shanghai Composite Index

* Target calculation: 2150 – ( 2500 – 2150 ) = 1800

Rising 13-week Twiggs Money Flow indicates buying pressure on Hong Kong’s Hang Seng Index. Breakout above 22000 would indicate a primary advance with a long-term target of 26000*.

Hang Seng Index

* Target calculation: 22 + ( 22 – 18 ) = 26

India’s Sensex continues to test its new support level at 18500. Recovery above 19000 would confirm the primary up-trend, while breach of support at 18000 would warn of a test of primary support at 16500. Rising 63-day Twiggs Momentum favors a primary advance.

Sensex Index

* Target calculation: 18.5 + ( 18.5 – 16.0 ) = 21.0

Singapore’s Straits Times Index is in a weak up-trend, consolidating below 3100. Breach of support at 3000 would test the lower edge of the trend channel. Reversal of 63-day Twiggs Momentum below zero would suggest further consolidation, while a fall below -5% would indicate a primary down-trend.

Straits Times Index

Japan’s Nikkei 225 is testing resistance at 9200. Breakout would indicate a rally to 10200. Oscillation of 63-day Twiggs Momentum below zero, however, continues to indicate a down-trend. Respect of 9200 would indicate another test of primary support at 8500.

Nikkei 225 Index

* Target calculation: 9200 + ( 9200 – 8200 ) = 10200

South Korea’s Seoul Composite index is testing support at 1900. Breach would warn of a correction to primary support at 1750. Reversal of 63-day Twiggs Momentum below zero would strengthen the bear signal.

Seoul Composite Index

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Asian market update

China’s Shanghai Composite Index is testing medium-term resistance at 2150. Breach of the descending trendline would suggest that a bottom is forming. Bullish divergence on 63-day Twiggs Momentum also indicates that the down-trend is weakening.

Shanghai Composite Index

* Target calculation: 2150 – ( 2500 – 2150 ) = 1800

India’s Sensex continues to test its new support level at 18500. Follow-through above 19000 would confirm the primary up-trend. Rising 13-week Twiggs Money Flow (above zero) indicates buying pressure.

Sensex Index

* Target calculation: 18.5 + ( 18.5 – 16.0 ) = 21.0

Japan’s Nikkei 225 is headed for another test of resistance at 9200. Breakout would indicate a rally to 10200. Oscillation of 13-week Twiggs Money Flow below zero, however, continues to warn of selling pressure. Respect of 9200 would indicate another test of primary support at 8500.

Nikkei 225 Index

* Target calculation: 9200 + ( 9200 – 8200 ) = 10200

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Asia: China, India and Japan

The Shanghai Composite Index is consolidating between 2000 and 2150. Descending 13-week Twiggs Money Flow warns of long-term selling pressure. Respect of resistance at 2150 is likely and breakout below 2000 would signal a decline to 1800*.

Shanghai Composite Index

* Target calculation: 2150 – ( 2500 – 2150 ) = 1800

Shenzhen Composite Index is testing primary support at 800. Again, descending 13-week Twiggs Money Flow indicates long-term selling pressure. Resistance at 900 is likely to be respected, while breakout below primary support would offer a target of 600*.

Shenzhen Composite Index

* Target calculation: 800 – (1000 – 800 ) = 600

Japan’s Nikkei 225 is testing support at 8650/8700. Respect would indicate a rally to 9200, while failure would complete a double top reversal, signaling a test of primary support at 8200. Rising 13-week Twiggs Money Flow suggests medium-term buying pressure but the long-term picture remains negative. Breach of 8200 would signal a primary down-trend with an initial target of 7200*.

Nikkei 225 Index

* Target calculation: 8200 – ( 9200 – 8200 ) = 7200

South Korea’s Seoul Composite Index is consolidating between 1950 and 2000. Rising 13-week Twiggs Money Flow indicates buying pressure. Breakout above 2000 is likely, followed by a test of the year’s high at 2050.

Seoul Composite Index

* Target calculation: 2050 + ( 2050 – 1900 ) = 2200

India’s Sensex is retracing to test the new support level at 18500. Respect would signal a strong up-trend, but even retracement to 18000 would not be cause for concern. Rising troughs above zero on 13-week Twiggs Money Flow indicate buying pressure. Follow-through above 19000 would signal an advance to 21000*.

Sensex Index

* Target calculation: 18.5 + ( 18.5 – 16.0 ) = 21.0

Singapore’s Straits Times Index retreated from resistance at 3100. Expect another test of support at 3000; confirmed if short-term support at 3050 is breached. Recovery above 3100 would confirm an advance to 3300 — as would a 63-day Twiggs Momentum trough above zero.

Singapore Straits Times Index

* Target calculation: 3000 + ( 3000 – 2700 ) = 3300

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Asia: India strong, China and Japan weak

India’s Sensex is holding above 18500, confirming the primary up-trend. Rising troughs above zero on 13-week Twiggs Money Flow indicate buying pressure. Follow-through above 19000 would signal an advance to 21000*.

Sensex Index

* Target calculation: 18.5 + ( 18.5 – 16.0 ) = 21.0

Singapore’s Straits Times Index is testing resistance at 3100. Narrow consolidation indicates buying pressure and breakout above 3100 would signal an advance to 3300*. A 63-day Twiggs Momentum trough above zero would signal a strong primary up-trend.

Singapore Straits Times Index

* Target calculation: 3000 + ( 3000 – 2700 ) = 3300

Japan’s Nikkei 225 is headed for a test of support at 8650. Failure would complete a double top reversal, signaling a test of primary support at 8200. Respect of zero (from below) by 13-week Twiggs Money Flow indicates selling pressure. Breach of 8200 would signal a primary down-trend with an initial target of 7200*.

Nikkei 225 Index

* Target calculation: 8200 – ( 9200 – 8200 ) = 7200

South Korea’s Seoul Composite Index is consolidating below 2000 on the daily chart. Rising 21-day Twiggs Money Flow, high above zero, indicates medium-term buying pressure. Expect a test of this year’s high at 2050. Breakout would signal a primary advance to 2350*.

Seoul Composite Index

* Target calculation: 2050 + ( 2050 – 1750 ) = 2350

Chinese exchanges are closed the entire week for Mid-Autumn Festival and National Day. The Shanghai Composite Index is headed for a re-test of 2150. Oscillation of 13-week Twiggs Money Flow around zero indicates hesitancy. Respect of resistance is likely and would signal a decline to 1800*.

Shanghai Composite Index

* Target calculation: 2150 – ( 2500 – 2150 ) = 1800

Hong Kong’s Hang Seng Index is closed Monday/Tuesday but will re-open Wednesday. Rising 13-week Twiggs Money Flow above zero indicates strong buying pressure. Expect retracement to test 20000 but respect is likely and would signal an advance to 22000.

Hang Seng Index

* Target calculation: 20 + ( 20 – 19 ) = 21

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China Alters Its Strategy in Dispute With Japan – NYTimes.com

By JANE PERLEZ

Notions of punishing Tokyo economically for buying the islands, whose status was left unclear after World War II, are unrealistic, said Hu Shuli, editor in chief of Caixin Media and one of China’s chief economic journalists. So many Chinese workers are employed at Japanese-owned companies, she said, that any escalation of tensions leading to a boycott of Japanese goods could lead to huge job losses.

This would be disastrous in an already shaky Chinese economy, Ms. Hu wrote in the Chinese magazine Century Weekly……

via China Alters Its Strategy in Dispute With Japan – NYTimes.com.

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Asia: India strong but China, Japan weaken

China’s Shanghai Composite Index followed through below recent support at 2050. Declining 13-week Twiggs Money Flow, below zero, indicates selling pressure. Target for the decline is 1800*.

Shanghai Composite Index

* Target calculation: 2150 – ( 2500 – 2150 ) = 1800

South Korea’s Seoul Composite Index is headed for a test of 2050. The 13-week Twiggs Money Flow trough above zero suggests a primary up-trend. Breakout above 2050 would confirm.

Seoul Composite Index

* Target calculation: 2050 + ( 2050 – 1750 ) = 2350

India’s Sensex broke through 18500, confirming the primary up-trend. The trough above zero on 13-week Twiggs Money Flow indicates buying pressure. Expect retracement to test the new support level.

Sensex Index

* Target calculation: 18.5 + ( 18.5 – 16.0 ) = 21.0

Singapore’s Straits Times Index is testing medium-term resistance at 3100. Rising 63-day Twiggs Momentum, above zero, indicates a primary up-trend.  Breakout above 3100 would indicate an advance to 3300*.

Singapore Straits Times Index

* Target calculation: 3000 + ( 3000 – 2700 ) = 3300

Japan’s Nikkei 225 retreated below the new support level at 9200. Reversal of 13-week Twiggs Money Flow below zero warns of a bull trap. Follow-through below 9000 would confirm.

Nikkei 225 Index

* Target calculation: 9200 + ( 9200 – 8200 ) = 10200

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China, Japan and the world’s Agadir Crisis (1911) – Telegraph Blogs

By Ambrose Evans-Pritchard

The US has an impossible task maintaining “neutrality”, and Beijing knows it.

Washington guarantees Japan’s defence under its US nuclear umbrella. It uses military bases on Japanese soil as an unsinkable aircraft carrier. It works hand in glove with Tokyo in a tight military alliance.

The question is whether Washington is really willing to uphold the Japanese alliance as the going gets tougher. Will it let America to be led by the nose by Japanese nationalists into a clash that is not obviously – or immediately – in US national interest?

President Barack Obama faces the toughest diplomatic choice of any US leader since John Kennedy…….

via China, Japan and the world’s Agadir Crisis (1911) – Telegraph Blogs.

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Japan Eases Monetary Policy in Surprise Move – WSJ.com

By MEGUMI FUJIKAWA And TATSUO ITO

TOKYO—The Bank of Japan took surprisingly strong steps to further ease its monetary policy on Wednesday, following similar steps by the Federal Reserve, as it tries to tackle entrenched deflation, an export-sapping strong yen and the impact of slowing global growth.

The central bank’s policy board decided at the end of a two-day meeting to increase the size of its asset-purchase program—the main tool for monetary easing with near-zero interest rates—to ¥80 trillion ($1.01 trillion) from ¥70 trillion.

via Japan Eases Monetary Policy in Surprise Move – WSJ.com.

Competitive devaluations, started by the ECB and followed by the Fed, PBOC and BOJ. Let the fun begin!

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Asia Update

Dow Jones China index is retracing to test primary support at 245. Declining 63-day Twiggs Momentum, below zero, continues to indicate a primary down-trend. Failure of support would offer a target of 200*.

Dow Jones China Broad Index

* Target calculation: 250 – ( 300 – 250 ) = 200

Hong Kong’s Hang Seng penetrated the descending trendline at 22000, indicating an advance to 22000. Recovery of 63-day Twiggs Momentum above zero suggests a primary up-trend. Breakout above 22000 would confirm.

Hang Seng Index

India’s Sensex broke through 18500, confirming the primary up-trend. The trough above zero on 13-week Twiggs Money Flow indicates buying pressure. Expect retracement to test the new support level.

Sensex Index

* Target calculation: 18.5 + ( 18.5 – 16.0 ) = 21.0

Singapore’s Straits Times Index respected support at 3000. Rising 63-day Twiggs Momentum, above zero, indicates a primary up-trend.  Follow-through above 3100 would indicate an advance to 3300*.

Singapore Straits Times Index

* Target calculation: 3000 + ( 3000 – 2700 ) = 3300

Japan’s Nikkei 225 is testing resistance at 9200. Breakout would signal a primary advance to 10200. Recovery of 13-week Twiggs Money Flow above zero indicates rising buying pressure.

Nikkei 225 Index

* Target calculation: 9200 + ( 9200 – 8200 ) = 10200

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