Countries & Regions Archives - Page 162 of 380

July 8, 2014

Asia: India leads but China & Japan improving

China’s Shanghai Composite Index retraced to test the new support level at 2050. A 21-day Twiggs Money Flow trough above zero signals strong medium-term buying pressure. Respect of support is likely and would signal a rally to 2090/2100. Failure is unlikely, but would test primary support at 1990/2000.

Shanghai Composite Index

* Target calculation: 2000 – ( 2150 – 2000 ) = 1850

Divergence on Japan’s Nikkei 225 (21-day Twiggs Money Flow) warns of medium-term selling pressure and another test of support at 15000. Respect of 15000 would confirm a rally to 16000*. Failure is unlikely, but would warn of another test of primary support at 14000.

Nikkei 225

* Target calculation: 15000 + ( 15000 – 14000 ) = 16000

India’s Sensex reached its target of 26000. Expect retracement to test the new support level at 25700/26000, but a 21-day Twiggs Money Flow trough above zero signals strong buying pressure. Breach of support is unlikely, but would warn of a correction to 25000. Further advances are likely, with a medium-term target of 27000.

Sensex

* Target calculation: 21000 + ( 21000 – 16000 ) = 26000

July 8, 2014

Canada: TSX 60 rally continues

Canada’s TSX 60 is also performing strongly, with 21-day Twiggs Money Flow indicating medium-term buying pressure. Expect a test of the 2008 high at 900. Reversal below support at 855 is unlikely, but would warn of a correction.

TSX 60

July 8, 2014

Dow breaks 17000

Dow Jones Industrial Average broke medium-term resistance at 17000 — after reaching 16000 in November last year. Expect retracement to test the new support level at 16950/17000. Mild divergence on 21-day Twiggs Money Flow warns of weak selling pressure. Reversal below 16750 is unlikely, but would indicate a correction.

Dow Jones Industrial Average

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

The Nasdaq 100 is on a bit of a tear, with rising 21-day Twiggs Money Flow indicating medium-term buying pressure. Respect of the rising trendline would suggest a rally to 4000*. Penetration of the trendline is unlikely, but would warn of a correction.

Nasdaq 100

* Target calculation: 3700 + ( 3700 – 3400 ) = 4000

July 8, 2014

Europe: Selling pressure

Dow Jones Euro Stoxx 50 is testing support at 3200/3230. Declining 21-day Twiggs Money Flow indicates medium-term selling pressure. Breach of 3200 and the rising trendline would warn of a correction and weakness in the primary up-trend. Recovery above 3300 is less likely, but would suggest another advance.

Dow Jones Euro Stoxx 50

* Target calculation: 3200 + ( 3200 – 3000 ) = 3400

DAX again retreated below the psychological barrier of 10,000. A sharp fall on 21-day Twiggs Money Flow indicates strong medium-term selling pressure. Expect further consolidation between 10000 and 9700. Failure of support would warn of a correction to the primary trendline at 9500. Recovery above 10000 is unlikely at present, but would indicate an advance to 10500*.

DAX

* Target calculation: 9750 + ( 9750 – 9000 ) = 10500

The Footsie also shows selling pressure on 21-day Twiggs Money Flow. Expect another test of 6700. Recovery above 6870 is unlikely at present, but would signal an advance to 7200*.

FTSE 100

* Target calculation: 6800 + ( 6800 – 6400 ) = 7200

July 6, 2014

238 Years After The First Revolution, Is It Time For A Second?

From Jerry Bowyer:

To determine whether the framers [of the Declaration of Independence] and their principles would cause us once again to break from a central political authority one must first get into the head space of the founders. Their way of thinking, though alien to modern political philosophy and so much the worse for modern political philosophy, is clear and cogent:

There are certain ideas which are self-evidently true. One of those ideas is that we are created without legal primacy or inferiority with regard to one another. Another idea, which is just obviously true to people whose rational faculties are operating properly, is that the rights to life and liberty and the pursuit of a prosperous life which is what the word ‘happiness’ meant in 1776 are not alienable, that is they cannot have a lien placed on them by any other persons, not even representatives of the state.

Not only is government denied the authority to put a lien on and repossess those rights, but it is further required to protect those rights. And in fact, the protecting of those rights is the only reason that government should exist in the first place! And not only is it necessary for government to protect these rights, but its use of power to do so is still only just if it also involves the consent of the people whose freedom and property are being protected. Further and this is shocking, even to modern ears, when governments move from protecting those rights to injuring those rights, the people are allowed to erase the authority of the government.

….No amount of banning or inciting can change the facts. 238 years ago the principles of the Declaration found that the central government had lost the right to rule and called on the people to withdraw allegiance to it. Is that the case now?

July 5, 2014

What a difference a week makes

Summary:

S&P 500 advances toward 2000.
China respects primary support.
ASX 200 rallies.

Market sentiment shifted significantly to the bull side after some solid employment numbers. There are still concerns about low interest rates across the US and other major economies, but these policies are likely to continue — with corporate earnings remaining buoyant — for the foreseeable future. And as Eddy Elfenbein observed: “…market corrections solely due to valuation are fairly rare. If the market’s dropping, earnings usually are too.”

The S&P 500 is advancing towards the psychological barrier of 2000. Weekly (13-week) Twiggs Money Flow recovered above its descending trendline and Daily (21-day) is trending higher, signaling medium-term buying pressure. Expect retracement at the 2000 level, but short duration or narrow consolidation would indicate continued buying pressure and another advance. Reversal below 1950 is unlikely, but would warn of a correction to the rising trendline.

S&P 500

* Target calculation: 1900 + ( 1900 – 1800 ) = 2000

Buoyed by Fed monetary policy, the CBOE Volatility Index (VIX) is at extremely low levels, indicative of a bull market.

S&P 500 VIX

The Shanghai Composite Index respected primary support at 1990/2000 and rising Twiggs Money Flow indicates medium-term buying pressure. Follow-through above 2080 would indicate another test of 2150. Further ranging between 2000 and 2150 is expected — in line with a managed “soft landing”. Breach of primary support is unlikely at present, but would signal a decline to 1850*.

Shanghai Composite

* Target calculation: 2000 – ( 2150 – 2000 ) = 1850

The ASX 200 is headed for another test of resistance at 5550 while an up-turn on 13-week Twiggs Money Flow suggests medium-term buying pressure. Twiggs Money Flow has been descending for some time, indicating long-term selling pressure, but failure to breach the zero line suggests buying support and completion of another trough above zero — with a rise above 20% — would confirm the resumption of long-term buying pressure. Breakout above 5550 would offer a long-term target of 5850*. Reversal below support at 5350 is unlikely, but would warn of a down-trend.

ASX 200

* Target calculation: 5400 + ( 5400 – 5000 ) = 5800

July 4, 2014

One-size-fits-all alcohol policies fail to help problem drinkers |IEA

From the Institute of Economic Affairs:

The cornerstone policies of Britain’s alcohol strategy are failing to reduce heavy drinking amongst the most vulnerable. New research from the Institute of Economic Affairs outlines the significant flaws of advertising bans, licensing restrictions and higher taxes, which not only fail to help problem drinkers, but punish the majority of responsible consumers.

The government and health campaigners have long favoured policies which aim to reduce per capita alcohol consumption to reduce heavy and harmful drinking. This outlook is based on a blunt model devised in the 1950s, and ignores countless studies which have demonstrated that particular subgroups drink at extremely varied levels. Attempting to reduce a national average ignores the obvious: that heavy drinking amongst a minority drastically pushes up the average.

In Punishing the Majority, authors John Duffy and Christopher Snowdon examine how a relatively small number of drinkers consume a disproportionately large amount of alcohol, with close to 70% of alcohol consumed by one fifth of the population. Using several examples, the authors show the extent to which per capita consumption depends on the drinking patterns of a minority.

The paper calls for politicians and campaigners to wake up to the complex reasons behind problem drinking. Instead of favouring political interventions on price, availability and advertising, the health lobby should pursue harm-reduction and rehabilitation.

July 3, 2014

Aussie retraces as ASX 200 strengthens

RBA concern over the rising Australian Dollar is increasing, but whether this will motivate governor Glenn Stevens to do more than attempt to talk the market lower remains to be seen. The Aussie retraced to test its new support level, but only a fall below $0.92 would suggest a trend change. Recovery above $0.94 would suggest not, while follow-through above $0.95 would confirm a target of $0.97.

AUDUSD

The ASX 200 broke clear of its descending trendline, suggesting that the correction is over. But 21-day Twiggs Money Flow remains weak and follow-through above 5540/5560 unlikely. Further ranging between 5400 and 5550 seems likely. Reversal below 5380 is now unlikely, but would warn of a test of 5300.

ASX 200

* Target calculation: 5550 + ( 5550 – 5400 ) = 5700

ASX 200 VIX again tracked lower, indicating a bull market.

ASX 200

July 3, 2014

Enough to make Gazputin grin

Chinese stocks drift lower
Crude oil rising
Other commodities weak

China’s Shanghai Composite Index continues to drift lower on the long-term, monthly chart.

Shanghai Composite Index

Apart from crude oil, commodity prices have fared little better. But crude plays such a dominant role in most commodity indices that they appear more buoyant. Dow Jones-UBS Commodity Index rallied to 140 before retracing for another test of primary support. Oscillation of 13-week Twiggs Momentum around zero, however, does not suggest a significant trend.

Dow Jones UBS Commodities Index

Crude oil is doing a lot better, heading for another test of $110/barrel on the back of supply threats from geo-political tensions. The ascending triangle is very large, but breakout would suggest a long-term target of the 2008 high at $145*.

Brent Crude and Nymex Crude

* Target calculation: 110 + ( 110 – 75 ) = 145

…Enough to make even Gazputin grin.

July 2, 2014

Gold rallies as inflation expectations rise

Overview:

Treasury yields are recovering
Inflation expectations rise
The Dollar weakens
Gold rallies

Interest Rates and the Dollar

The yield on ten-year Treasury Notes found support at 2.50 percent. Recovery above 2.65 would suggest the correction is over, offering a medium-term target of 2.80 and long-term of 3.00 percent. 13-Week Twiggs Momentum below zero continues to indicate weakness. Reversal below 2.40 would signal a decline to 2.00 percent* — confirmed if yield follows through below 2.40 percent.

10-Year Treasury Yields

* Target calculation: 2.50 – ( 3.00 – 2.50 ) = 2.00

Long-term inflation expectations, indicated by 10-Year Treasury Yields minus 10-Year Inflation-Indexed (TIPS) Yields below, turned upward after 12-month CPI jumped to 1.8 percent in May, but are still range-bound between 2.0 and 2.50 percent.

10-Year Treasury Yields minus 10-Year Inflation Indexed (TIPS) Yields

The Dollar Index continues to head for primary support at 79.00 after retreating below 80.50. Respect of zero by 13-week Twiggs Momentum warns of continuation of the primary down-trend. Recovery above 80.50 is unlikely at present, but would suggest an advance to 81.50.

Dollar Index

Gold

Gold is testing medium-term resistance at $1325/$1330. Breakout would signal a test of $1400. Recovery of 13-week Twiggs Momentum above zero hints at a primary up-trend; breakout above $1400 would confirm. Retreat below $1280 is unlikely, but would warn of the opposite; confirmed if support at $1240 is breached.

Spot Gold