Countries & Regions Archives - Page 187 of 378

January 9, 2014

Japan bullish, but India & China reflect selling pressure

Japan’s Nikkei 225 is retracing to test its latest support level at 16000. Rising 13-week Twiggs Money Flow after a trough above zero indicates buying pressure. Respect of support would confirm a primary advance, with a long-term target of 17500*. A rising Dollar/Yen exchange rate would strengthen the signal. Breach of the rising trendline is unlikely, but would warn of another correction.

Nikkei 225

* Target calculation: 15000 + ( 15000 – 12500 ) = 17500

China’s Shanghai Composite breached support at 2080, confirming the primary down-trend. Expect support at 1950: the low of December 2012 and respected in 2013. Twiggs Money Flow below zero indicates selling pressure. Recovery above 2080 is unlikely but would warn of a bear trap.

Shanghai Composite Index

India’s Sensex encountered strong resistance at 21200 and declining 13-week Twiggs Money Flow warns of medium-term selling pressure. Expect another test of support at 20200. Failure would warn of a primary down-trend. Breakout above 21200 is unlikely in the next few weeks, but would suggest a primary advance to 22000*.

Sensex

* Target calculation: 21000 + ( 21000 – 20000 ) = 22000

January 9, 2014

TSX 60 in healthy shape

Canada’s TSX 60 is in healthy shape, with 13-week Twiggs Money Flow troughs above zero indicating strong buying pressure. Breakout above 780 would confirm an advance to 820*. Reversal below 740 is most unlikely, but would warn of a test of primary support at 675/680.

TSX 60

* Target calculation: 780 + ( 780 – 740 ) = 820

January 9, 2014

S&P 500, Nasdaq bullish

Short (3-day) retracement on the S&P 500 would indicate a strong trend. Follow-through above 1850 would confirm the target of 1910*. Rising 21-day Twiggs Money Flow highlights medium-term buying pressure.

S&P 500

* Target calculation: 1810 + ( 1810 – 1710 ) = 1910

CBOE Volatility Index (VIX) readings below 20 continue to indicate a bull market.

VIX Index

The Nasdaq 100 continues its accelerating up-trend, with rising Twiggs Money Flow troughs above the zero line indicating strong buying pressure. The last decent correction was in June 2013 and continuation of the advance much further without another correction of at least 2 to 3 weeks would suggest the market is becoming over-extended.

Nasdaq 100

December 29, 2013

Bullish lead-in to the New Year

The S&P 500 broke resistance at 1810, signaling an advance to 1910*. Troughs high above zero on 13-week Twiggs Money Flow indicate strong buying pressure.

S&P 500

* Target calculation: 1810 + ( 1810 – 1710 ) = 1910

The FTSE 100 completed its correction with a break above the descending trendline. Troughs above zero on 13-week Twiggs Money Flow indicate buying pressure. Breakout above 6800 would offer a target of 7200*, but expect strong resistance at the 1999 high of 6950/7000.

FTSE 100

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

The Dow Jones Euro Stoxx 50 broke resistance at 3100, signaling an advance to 3350*. Troughs above zero on 13-week Twiggs Momentum indicate a healthy up-trend. Retracement to test the new support level is likely; respect would strengthen the bull signal.

Dow Jones Euro Stoxx 50

* Target calculation: 3100 + ( 3100 – 2850 ) = 3350

Germany’s DAX similarly broke resistance at 9400, offering a target of 10200*. Troughs high above zero on 13-week Twiggs Money Flow indicate strong buying pressure.

DAX

* Target calculation: 9400 + ( 9400 – 8600 ) = 10200

India’s SENSEX is testing resistance at 21200 after a correction that respected support at 20200. Breakout would signal an advance to 22200*. A 13-week Twiggs Money Flow trough above zero would indicate buying pressure and a healthy up-trend.

BSE Sensex

* Target calculation: 21200 + ( 21200 – 20200 ) = 22200

Japan’s Nikkei 225 broke resistance at 16000, supported by a strong rise in the Dollar/Yen exchange rate. Breakout signals a primary advance with a long-term target of 19000*. Completion of a 13-week Twiggs Money Flow trough above zero suggests buying pressure and a healthy up-trend.

Nikkei 225

* Target calculation: 16000 + ( 16000- 13000 ) = 19000

A single cloud on the horizon, the Shanghai Composite Index is testing primary support at 2080. Failure of support would signal a primary down-trend with an immediate target of 1900*. Bearish divergence on 21-day Twiggs Money Flow indicates medium-term selling pressure, but recovery above zero would suggest support.

Shanghai Composite

* Target calculation: 2080 – ( 2260 – 2080 ) = 1900

The ASX 200 is lagging other markets because of negative influence from China. Bearish divergence on 13-week Twiggs Money Flow indicates selling pressure. Respect of resistance at 5450 would be cause for concern if followed by reversal below 5300. Breakout above 5450 and completion of a trough above zero on 13-week Twiggs Money Flow, however, would signal another primary advance, with a target of 5900*.

ASX 200

* Target calculation: 5450 + ( 5450 – 5000 ) = 5900

December 26, 2013

Australian Made | SBS Insight

This discussion on SBS Insight from April 24th, 2012 covers the Australian manufacturing dilemna:

There are three major costs in manufacturing: material costs, labor costs and other operating expenses. Roughly equal in size. Material costs are roughly the same, whether you are in Australia or China. Labor costs are radically different, with labor costs of $15 compared to $1 in China. But Australia also can’t compete on other operating expenses, which are far higher because of the labor cost and related benefits…….I can’t see why Australia hasn’t got the sense to turn around. We have been on this path for 30 years…
~ Peter Rodeck, Australian manufacturer EnvironData.

December 24, 2013

Strong recovery in 2014

The S&P 500 followed through above 1810, signaling another primary advance. Troughs high above zero on 13-week Twiggs Money Flow indicate strong long-term buying pressure. Short corrections such as the recent retracement are normally followed by strong gains, but there is no reliable method calculating targets in an accelerating up-trend. The target of 1910* calculated by the conventional method may well underestimate the advance.

S&P 500

* Target calculation: 1810 + ( 1810 – 1710 ) = 1910

My favorite bellwether, transport stock Fedex, is surging ahead on the monthly chart, suggesting a strong recovery for the US economy in the year ahead.

Fedex

CBOE Volatility Index (VIX) readings below 20 also suggest a bull market.

VIX Index

December 23, 2013

Russia 1998 crisis haunts Deutsche Bank analyst seeing China bust | Livemint

When the Deutsche Bank AG equity strategist [John-Paul Smith] looks at the country [China], he says he detects some of the same signs of a financial meltdown that led him to predict Russia’s 1998 stock market crash months in advance. China’s expansion is being fueled by soaring corporate borrowing, a high-risk model that needs to be replaced by the kind of free-market measures and budget cuts that fed Russia’s growth in the aftermath of the country’s default and subsequent 44% monthly tumble in the Micex Index, Smith said.

There is potential for a debt trap in industrial companies which can trigger an economy-wide financial crisis as early as next year, Smith said in an interview from London on 12 December, a day after he issued a report predicting China’s slowdown will lead to a 10% decline in emerging-market stocks next year. “If I am wrong on China, I am wrong on everything.”

December 21, 2013

Why Australian manufacturing is dying

The following graphs from the Productivity Commission Preliminary Report on Australia’s Automotive
Manufacturing Industry give an insight into the problems facing Australian manufacturers.

The first graph compares average hourly labor costs for auto-manufacturers in different countries. Australia is second-highest (behind Germany), in terms of labor cost per hour, and roughly 7 times as high as China and India — ignoring local ABS figures for which there are no comparatives.

Hourly Labor Costs

The second graph shows how the rising Australian Dollar has impacted on local auto-manufacturing.

Australian motor vehicle production compared to the trade weighted exchange rate

The local market is not big enough to sustain a competitive auto-manufacturing industry, but that argument does not seem to have hindered five of the top seven global manufacturers — Volkswagen, Hyundai, Toyota, Nissan and Honda — whose local markets are of a similar scale to our own. The difference is that they have adopted a global outlook rather than focusing on their own domestic market as Australia has done.

December 21, 2013

Productivity Commission report says Australian car makers can’t compete on labour costs

An increasing amount of the world’s cars are now built in countries such as Brazil, China, India, Mexico and Thailand, while countries such as Australia, the US, the UK and Belgium have shed workers since 2008.

The [Productivity Commission] report finds labour costs in Australia “relatively high”, although not substantially different to Germany or Japan. “But [they] are four times or more those of China, Thailand and other developing countries where motor vehicle production is expanding,” it found.

December 20, 2013

What Happens When Unemployment Benefits Are Cut? North Carolina Offers a Clue | WSJ

Cutting out benefits can reduce the jobless rate in two ways, says Mr. Feroli [Michael Feroli, chief U.S. economist at J.P. Morgan], pointing to past economic literature. Under the employment effect, people will take jobs even if the work pays less than the job seekers want. In the participation effect, people will drop out of the measured workforce since actively seeking a job (a criterion for being labeled officially unemployed) no longer carries an advantage of receiving jobless benefits.