Countries & Regions Archives - Page 135 of 373

October 7, 2014

ASX finds support

After taking a beating in the morning session, the ASX 200 rallied to close almost unchanged. The long tail and rising 21-day Twiggs Money Flow indicate short-term buying pressure. Follow-through above 5360 and the declining trendline would suggest that the correction is over. But reversal below 5240 remains as likely and would warn of a test of primary support at 5000/5050.

ASX 200

* Target calculation: 5350 – ( 5650 – 5350 ) = 5050

The ASX 200 VIX is creeping upwards, but remains at levels typical of a bull market.

ASX 200

October 7, 2014

Asia: Sensex selling pressure

Shanghai remains closed for National Day holidays, October 1st to 7th.

India’s Sensex is testing support at 26500. Penetration of the secondary rising trendline and follow-through below 26000 would warn of a correction. Bearish divergence on 13-week Twiggs Money Flow continues to signal selling pressure. Reversal below zero would warn of a trend change. Recovery above 27000 is unlikely at present, but would indicate an advance to 28000*.

Sensex

* Target calculation: 27000 + ( 27000 – 26000 ) = 28000

Japan’s Nikkei 225 index is testing support at 15500 and the rising trendline. Failure of support would warn of a secondary correction, but 13-week Twiggs Money Flow continues to indicate buying pressure. Recovery above 16000 would suggest another advance. Breakout above 16300 would confirm.

Nikkei 225

* Target calculation: 16000 + ( 16000 – 14000 ) = 18000

October 7, 2014

Dollar retraces

The Dollar Index is retracing to test its new support level at 84.50. Respect would confirm a primary advance with a target of 89*. Rising 13-week Twiggs Momentum indicates a healthy primary up-trend. Failure of support is unlikely, but would warn of a correction to the primary trendline.

Dollar Index

* Target calculation: 84 + ( 84 – 79 ) = 89.00

October 7, 2014

October clearance sales not yet over

Dow Jones Industrial Average ran into resistance at 17000 signaling that the October clearance sales may not yet be over. 21-Day Twiggs Money Flow oscillating around zero suggests hesitancy despite the good job numbers. The primary trend is bullish, but reversal below 16700 would warn of a secondary correction.

Dow Jones Industrial Average

* Target calculation: 16500 + ( 16500 – 15500 ) = 17500

The Nasdaq 100 found support at 3950/4000 on the weekly chart. Recovery above 4100 would indicate a further advance, while follow-through below 3950 would warn of a correction to the primary trendline at 3750/3850. Mild divergence on 13-week Twiggs Money Flow suggests further selling pressure.

Nasdaq 100

* Target calculation: 4000 + ( 4000 – 3750 ) = 4250

October 7, 2014

Reserve currency status: Privilege or burden?

Is the reserve currency status of the US Dollar a privilege or a burden? Michael Pettis suggests the latter and argues in favor of constraining unlimited purchases of US or other government bonds by international trading partners like China and Japan:

…it is actually quite easy to list the conditions under which reserve currency status encourages growth and the conditions under which it forces a rise either in debt or in unemployment. In advanced countries with deep and flexible financial markets, except in the case in which capital has become severely constrained by the need for money to be backed by gold, or real interest rates have been forced up to extremely high levels in order to break inflation as was the case in the late 1970s and early 1980s, the net inflows associated automatically with reserve currency status will not result in an increase in productive investment. They only result in an increase either in debt or in unemployment.

This is not an argument in favor of returning to gold, by the way. It is completely neutral on the issue. This argument simply restates the Keynesian insight that eliminating the discipline imposed by the gold standard is likely to become destabilizing unless there is another way to impose discipline…..

….the potentially destabilizing effect is no longer so distant. In a recent essay I tried to show that if we have not already reached the point at which the dominant reserve currency status of the US dollar is harmful to the US and potentially destabilizing to the world, logically we will inevitably reach that point, and probably soon….

I have frequently argued that capital account inflows into US Treasuries artificially inflate the dollar, give trading partners a competitive advantage, and cause the loss of millions of manufacturing jobs. Failure to address this issue is one of the major causes of low wage growth and rising inequality in the US.

October 6, 2014

Brazil: Stockholders cast their vote in upcoming election

In emerging markets, Brazil’s stock market surged after the left-leaning President Dilma Rousseff was forced into a run-off race against Aecio Neves, a centre-right challenger, who only surged in the final week of the campaign. Ms Rousseff is promising to expand Brazil’s social programmes and continue strong state involvement in the economy, while Mr Neves says he will pursue more centrist economic approaches, such as central bank independence, more privatisations and the pursuit of trade deals with Europe and the United States.

Brazil’s benchmark Ibovespa index rose 4.7% to 57,115.

October 6, 2014

We Should Be Protesting Too | BillMoyers.com

Lawrence Lessig compares pre-selection in America’s “green primary” to Beijing’s 1200-strong “nominating committee” proposed for Hong Kong elections:

To run in any election, primary or general, candidates must raise extraordinary sums, privately. Yet they raise that money not from all of us. They raise it from a tiny, tiny few. In the last non-presidential election, only about .05 percent of America gave the maximum contribution to even one congressional candidate in either the primary or general election; .01 percent gave $10,000 or more; and in 2012, 132 Americans gave 60 percent of the superPAC money spent. This is the biased filter in the first stage of our American democracy….

America’s government is demonstrably responsive to the “economic elite and organized business interests,” Gilens and Page found, while “the preferences of the average American appear to have only a minuscule, near-zero, statistically non-significant impact upon public policy.”…..

There is no doubt that because of the way we fund campaigns, the “economic elite” — what conservatives call “the cronies” and progressives “corporate power” — have hijacked American democracy…..

October 4, 2014

US job growth rebounds

US job growth rebounds, halting the correction
Gold and crude oil are falling
European stocks remain bearish
Asian stocks are bearish
US stocks continue to indicate a bull market

We are at the September quarter-end and stock weakness is likely to continue into October.

From the Wall Street Journal:

U.S. job growth rebounded in September and the jobless rate fell below 6% for the first time since mid-2008, suggesting the labor market is improving faster than previously thought. Nonfarm payrolls grew a seasonally adjusted 248,000 last month, the fastest pace since June, the Labor Department said Friday.

The S&P 500 broke downwards from its broadening wedge formation this week, warning of a correction to 1900. But Thursday’s long tail and Friday’s rally indicate buying support below 1950. Another test of 2000 is likely. Respect of resistance would warn of further weakness in October, while breakout would suggest a fresh advance; follow-through above 2020 would confirm.

S&P 500

* Target calculation: 2000 + ( 2000 – 1900 ) = 2100

CBOE Volatility Index (VIX) remains below 20, typical of a bull market.

S&P 500 VIX

Dow Jones Euro Stoxx 50 found support at 3100, but this is unlikely to hold. Expect another test of primary support at 3000. Breach would signal a down-trend. Fall of 13-week Twiggs Money Flow below zero would strengthen the bear signal.

Dow Jones Euro Stoxx 50

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

Dow Jones Asia Index is headed for a test of 2800 on the weekly chart despite continued bullishness on the Shanghai Composite, reflecting strength in the US Dollar. Penetration of the rising trendline would strengthen the bear signal. Reversal of 13-week Twiggs Momentum below zero also signals a primary down-trend.

Dow Jones Asia Index

The ASX 200 found support at 5250. Recovery above 5350 and the descending trendline would suggest that the correction is over. But respect of resistance remains as likely and breach of 5250 would warn of a test of 5000/5050. Recovery of 21-day Twiggs Money Flow above zero would indicate short-term buying pressure.

ASX 200

* Target calculation: 5650 + ( 5650 – 5350 ) = 5950

October 2, 2014

ASX tests resistance

The ASX 200 found resistance at 5350. Respect of the zero line (from below) by 21-day Twiggs Money Flow warns of continued selling pressure. Failure of support at 5250 would warn of a test of primary support at 5000/5050. Recovery above 5350 is less likely, but would suggest another rally.

ASX 200

* Target calculation: 5350 – ( 5700 – 5350 ) = 5000

The ASX 200 VIX is rising, but remains at levels typical of a bull market.

ASX 200

October 2, 2014

S&P 500 breaks support

The S&P 500 broke through the lower border of the broadening wedge and the secondary trendline at 1965, indicating a correction. Expect support at 1900. Decline of 21-day Twiggs Money Flow below zero would strengthen the signal, while recovery above 25% (September high) would suggest that buyers are back in control.

S&P 500

* Target calculation: 2000 + ( 2000 – 1900 ) = 2100

CBOE Volatility Index (VIX) is close to 17%, but the low level continues to suggest a bull market.

VIX Index