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Sellers evaporated as the S&P 500 followed-through above 1860, closing at 1875 on normal volume. Expect an advance to 1950*. The long-term trend is bullish, with repeated 21-day Twiggs Money Flow troughs above the zero line.
* Target calculation: 1850 + ( 1850 – 1750 ) = 1950
CBOE Volatility Index (VIX) retreated below 15, typical of a bull market.
Shannon Tiezzi writes:
China’s ambiguous position reveals its dilemma. Beijing’s instinct is to back Moscow, both to uphold the fruitful cooperation between these two nations and to stand firm against pressure from the West. However, vocally supporting Russia would violate China’s principle of non-interference. More importantly, it could arguably set a precedent of Chinese support for military intervention to protect separatists unhappy with their government—which goes against all China’s instincts, given its own issues with Tibet and Xinjiang provinces. Yet as the Global Times put it, at the end of the day power calculations mean more than principles. China’s geopolitical strategy requires Beijing to at least tacitly support Russia, and at the end of the day that argument outweighs more abstract philosophical concerns.
Read more at China Backs Russia on Ukraine | The Diplomat.
The FTSE 100 is testing resistance at 6850. Rising troughs above zero on 13-week Twiggs Money Flow signal buying pressure. Breakout would encounter further resistance at the 1999 high of 7000, so the calculated target of 7200 may be unrealistic. Reversal below 6700 is unlikely, but would test primary support at 6400.
* Target calculation: 6800 + ( 6800 – 6400 ) = 7200
The Euro has held up well despite rising tensions with Russia over the Ukraine. Reversal below $1.365 would warn of a test of primary support at $1.35. Bearish divergence on 13-week Twiggs Momentum suggests another correction. Breakout above $1.38 is less likely at present, but would signal an advance to $1.43*.
* Target calculation: 1.38 + ( 1.38 – 1.33 ) = 1.43
Dow Jones Euro Stoxx 50 retreated below 3100 and is likely to test primary support at 2920/2950. Breach of primary support would signal reversal to a down-trend.
* Target calculation: 3150 + ( 3150 – 2950 ) = 3350
Germany’s DAX is stronger, with rising 13-week Twiggs Money Flow suggesting another attempt at 10,000. But retreat below 9500 would test primary support at 9000.
DAX Volatility spiked above 20, but still reflects moderate risk.
David Rohde at Reuters quotes James Jeffrey, a retired career U.S. diplomat:
Jeffrey said the days and months ahead will be vital. If Putin faces few long-term consequences for seizing Crimea, it will set a precedent for China and other regional powers who may be considering establishing 19th century-style spheres of influence of their own.
“The Chinese,” Jeffrey said, “are in the same position.”
Read more at As China looks on, Putin poses risky dilemma for the West | Reuters.
E-mini jumps on Putin order for troops to return to bases (Reuters).
Breakout above 1850 is a bullish sign. S&P 500 follow-through above 1860 would signal an advance to 1950.
In A Century of Policy Mistakes Neils Jensen describes the demise of Argentina over the last 100 years.
A century ago Argentina ranked as one of the wealthiest countries in world, behind the United States, the United Kingdom and Australia but ahead of countries such as France, Germany and Italy. Its per capita income was 92% of the G16 average; it is 43% today. Life in Argentina was good. It enjoyed the benefits of one of the highest growth rates in the world and attracted immigrants left, right and centre. Boom times galore.
Argentina’s wealth was based on agriculture, but also on its strong ties with the UK, the pre-World War I global powerhouse. Equally importantly, it understood the importance of free trade and took advantage of the relatively open markets which prevailed in the years leading to the Great War. Most importantly, though, it benefitted from, but also relied upon, enormous inflows of capital from the rest of the world. All of this is well documented in a recent piece in The Economist which you can find here.
Neils identifies three main causes:
It occurred to me that, apart from education, Australia has made the same mistakes.
Read more at A Century of Policy Mistakes | Niels Jensen – Absolute Return Partners | PRAGMATIC CAPITALISM.
Quote from Anatole Kaletsky, Gavekal, in John Mauldin’s Outside the Box newsletter:
…..it is literally inconceivable that Putin will ever withdraw from Crimea. To give up Crimea now would mean the end of Putin’s presidency, since the Russian public, not to mention the military and security apparatus, believe almost unanimously that Crimea still belongs to Russia, since it was only administratively transferred to Ukraine, almost by accident, in 1954. In fact, many Russians believe, rightly or wrongly, that most of Ukraine “belongs” to them. (The very name of the country in Russian means “at the border” and certainly not “beyond the border”). Under these circumstances, the idea that Putin would respond to Western diplomatic or economic sanctions, no matter how stringent, by giving up his newly gained territory is pure wishful thinking.
Read more at John Mauldin: Outside the Box.
“Anyone who doesn’t regret the passing of the Soviet Union has no heart. Anyone who wants it restored has no brains.” ~ Vladimir Putin