Category: Japan & Korea

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Asian markets: India bullish while China weakens

Japan’s Nikkei 225 index is testing medium-term resistance at 9000/9100. Breakout would test 10000. Troughs below zero on 13-week Twiggs Money Flow indicate weakness.

Nikkei 225 Index

China’s Shanghai Composite Index is retracing to test resistance at 2250. Respect would confirm a primary down-trend — already signaled by 63-day Twiggs Momentum below zero.

Shanghai Composite Index

* Target calculation: 2250 – ( 2500 – 2250 ) = 2000

Wait for confirmation from a Shenzhen Composite index reversal below 880/900. A 63-day Twiggs Momentum peak below zero would strengthen the signal.

Shenzhen Composite Index

Singapore Straits Times Index broke through medium-term resistance at 2900, headed for a test of 3050. Recovery of 63-day Twiggs Momentum above zero suggests that the primary up-trend is intact.

Singapore Straits Times Index

* Target calculation: 3050 + ( 3050 – 2900 ) = 3200

India’s Sensex displays a healthy bullish divergence on 13-week Twiggs Money Flow, indicating reversal to a primary up-trend. Breakout above 17000 suggests another test of 18500. And breach of 18500 would confirm the primary up-trend.

Sensex Index

* Target calculation: 18500 + ( 18500 – 16000 ) = 21000

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Japan, India and Singapore

Dow Jones Japan Index retreated from resistance at 50 and is headed for a re-test of support at 46. Failure would signal a decline to 42*. 13-Week Twiggs Money Flow below zero indicates selling pressure and a peak below zero would warn of a strong down-trend.

Dow Jones Japan Index

* Target calculation: 46 – ( 50 – 46 ) = 42

India’s Sensex penetrated its declining trendline but almost immediately encountered resistance at 17000. Bullish divergence on 13-week Twiggs Money Flow indicates strong support and breakout above 17000 would suggest a primary advance — confirmed if the peak at 18500 is bested. Reversal below 15800, however, would warn of a decline to 15000*.

BSE Sensex Index

* Target calculation: 16000 – ( 17000 – 16000 ) = 15000

Singapore’s Straits Times Index is testing resistance at 2900. Respect of zero by 63-day Twiggs Momentum warns of continuation of the down-trend; breach of support at 2700 would confirm, offering a target of 2500*.

Singapore Straits Times Index

* Target calculation: 2700 – ( 2900 – 2700 ) = 2500

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Forex: Europe, Australia, Canada, South Africa and Japan

The Euro is testing its new resistance level at $1.26. Respect would offer a target of $1.17*. Bullish divergence on 63-day Twiggs Momentum, however, warns that the down-trend is weakening; recovery above zero would suggest reversal to a primary up-trend. Breach of the descending trendline would strengthen the signal.

EUR/USD

* Target calculation: 1.26 – ( 1.35 – 1.26 ) = 1.17

Pound Sterling displays a strong up-trend against the euro, again testing resistance at €1.25. Breakout would signal an advance to €1.30*. 63-Day Twiggs Momentum oscillating high above zero indicates trend strength.

GBP/USD

* Target calculation: 1.26 + ( 1.26 – 1.22 ) = 1.30

The Greenback has corrected sharply against the Japanese Yen before finding medium-term support at ¥78. Recovery above ¥80 (and the descending trendline) would indicate that the correction is over, while breach of support would test primary support at ¥75.50/76.50. The long-term bullish divergence on 63-Day Twiggs Momentum continues to warn of reversal to an up-trend.

USD/JPY

* Target calculation: 84 + ( 84 – 78 ) = 90

Sharply falling crude oil prices have weakened Canada’s Loonie relative to the Aussie Dollar. Against the greenback, the Loonie bounced of short-term support at $0.96 but this is unlikely to last and we should expect a test of primary support at $0.94/0.95. A 63-day Twiggs Momentum peak below zero would warn of a primary down-trend.

Canadian Dollar

* Target calculation: 0.96 – ( 0.98 – 0.96 ) = 0.94

The Aussie Dollar lifted along with commodity prices and is headed for a test of $1.02 (USD). Upward breakout would signal an advance to $1.08, while respect of resistance (and the descending trendline) would warn of a decline to $0.90*. A 63-day Twiggs Momentum peak below zero would strengthen the bear signal.

Aussie Dollar

* Target calculation: 0.96 – ( 1.02 – 0.96 ) = 0.90

The Aussie Dollar is headed for a test of resistance at R8.50 (South African Rand). Breakout would offer a target of R9.00*. Reversal of 63-Day Twiggs Momentum below zero, however, would warn of a primary down-trend.

Aussie Dollar/South African Rand

* Target calculation: 8.50 + ( 8.50 – 8.00 ) = 9.00

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Asia-Pacific stocks surge on Greek election results

ASX 200 Index is testing resistance at 4120 after Greek voters narrowly favored the New Democracy party in Sunday’s election — meaning that Greece is likely to remain in the euro-zone. Bullish divergence on 21-day Twiggs Money Flow indicates medium term buying pressure — following breach of the descending trendline suggested that the correction was over. Follow-through above 4150 would strengthen the signal, offering a target of the May high at 4450.

ASX 200 Index

Dow Jones South Korea Index respected support at 402. Breakout above 420 would confirm that the down-trend is over. Recovery of 63-day Twiggs Momentum above zero would strengthen the signal.

Dow Jones South Korea Index

Dow Jones Japan Index is testing the descending trendline and short-term resistance at 49. 63-Day Twiggs Momentum still reflects a primary down-trend, but breach of the descending trendline would warn that a bottom is forming.

Dow Jones Japan Index

Dow Jones Hong Kong Index is testing medium-term resistance at 388. Breach of the descending trendline warns that a bottom is forming. Upward breakout would indicate a rally to 440. Recovery of 63-day Twiggs Momentum above zero would strengthen the signal.

Dow Jones Hong Kong Index

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Forex: Japanese Yen

The US Dollar broke support at ¥80 Japanese Yen and is now at the 61.8% Fibonacci level. Failure of short-term support at ¥79 would indicate another test of primary support at ¥76. The long-term bearish divergence on 63-day Twiggs Momentum continues, however, and a trough above zero would indicate a fresh primary advance. Breakout above ¥84 would confirm.

USD/Japanese Yen

* Target calculation: 84 + ( 84 – 80 ) = 88

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Japan & South Korea

Japan’s Nikkei 225 Index is headed for a test of primary support at 8000 after breaking both support at 9000 and the rising trendline. 13-Week Twiggs Money Flow below zero warns of long-term selling pressure. Breach of 8000 would resume the primary down-trend, offering a long-term target of 6000*.

Nikkei 225 Index

* Target calculation: 8000 – ( 10000 – 8000 ) = 6000

Dow Jones South Korea Index is retracing to test resistance at 425 after a sharp fall below the rising trendline. Reversal of 63-day Twiggs Momentum below zero warns of a primary down-trend. Failure of primary support at 380 would confirm, signaling a decline to the 2011 low of 350.

Dow Jones South Korea Index

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Forex: Japanese Yen

The US Dollar found support at ¥80 Japanese Yen. A 63-day Twiggs Momentum trough high above zero would indicate a strong up-trend. Recovery above the declining trendline and resistance at ¥82 would strengthen the signal. Failure of support is unlikely but would test primary support at ¥76.

USD/Japanese Yen

* Target calculation: 84 + ( 84 – 80 ) = 88

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Japan & South Korea

Dow Jones Japan Index is headed for a test of primary support at 47. Reversal of 13-week Twiggs Money Flow below zero warns of long-term selling pressure. Failure of support would resume the primary down-trend, offering a target of 38*.

Dow Jones Japan Index

* Target calculation: 48 – ( 58 – 48 ) = 38

Dow Jones South Korea Index reflects stronger support on 13-week Twiggs Money Flow, but reversal of 63-day Twiggs Momentum below zero would still warn of a primary down-trend. Failure of primary support at 380 would confirm.

Dow Jones South Korea Index

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Forex: US Dollar/Japanese Yen

The US dollar is testing long-term support at ¥80. Failure would warn of weakness in the primary up-trend but 63-Day Twiggs Momentum holding above zero suggests continuation. Recovery above ¥82 would indicate a fresh primary advance, with a target of ¥90*.

US Dollar/ Japanese Yen

* Target calculation: 85 + ( 85 – 80 ) = 90

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Forex: US Dollar/Yen

The US dollar is testing long-term support at ¥80. Failure would warn of weakness in the primary up-trend, while respect would indicate a primary advance to ¥90. 63-Day Twiggs Momentum holding above zero suggests continuation of the primary trend.

US Dollar/ Japanese Yen

* Target calculation: 85 + ( 85 – 80 ) = 90

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