Countries & Regions Archives - Page 191 of 378

November 13, 2013

Dow follows through

Dow Jones Industrial Average followed through above 15800 after breaking resistance at 15700 to signal a fresh advance. Expect retracement to again test 15700 in the next few weeks, but respect of the new support level strengthens the breakout signal. Long-term target for the advance is 16600*. Rising 21-day Twiggs Money Flow indicates medium-term buying pressure. Reversal below 15500 is unlikely, but would warn of another test of primary support at 14800.

Dow Jones Industrial Average

* Target calculation: 15700 + ( 15700 – 14800 ) = 16600

November 12, 2013

ASX at resistance as Asia consolidates

India’s Sensex retreated from its 2007 and 2010 highs at 21000 and is testing support at 20500. Respect would signal a primary advance with a target of 24000*. Rising 13-week Twiggs Money Flow suggests medium-term buying pressure. Reversal below 20500 is less likely, but would warn of a correction to 19500 and possibly primary support at 18000.

Sensex

* Target calculation: 21000 + ( 21000 – 18000 ) = 24000

Dow Jones Japan index is proving resilient, headed for another test of resistance at 82. Breakout would signal an advance to 90*. 13-Week Twiggs Momentum is declining, but has so far respected the zero line, suggesting the primary up-trend is intact. Completion of a trough above zero would strengthen the signal. Reversal below the rising trendline is unlikely but would warn of another test of primary support at 74.

Dow Jones Japan index

* Target calculation: 82 + ( 82 – 74 ) = 90

Dow Jones Shanghai Index is rallying to test resistance at 282 after finding support at 270. Respect of resistance is likely and breach of 270 would signal a test of primary support at 245/250. Twiggs Momentum oscillating around the zero line indicates uncertainty.

DJ Shanghai Index

The ASX 200 is consolidating in a narrow range below resistance at 5450 — a bullish sign. Upward breakout would signal an advance to 5600*. Bearish divergence on 13-week Twiggs Money Flow, however, continues to warn of selling pressure. Reversal below 5300, penetrating the rising trendline, would signal a correction.

ASX 200

* Target calculation: 5450 + ( 5450 – 5300 ) = 5600

November 12, 2013

European stocks advance

The FTSE 100 is testing its new support level at 6700. Follow-through above 6800 would indicate respect — and an advance to the December 1999 high of 6950/7000*. Rising 13-week Twiggs Money Flow suggests buying pressure. Reversal below 6600 is unlikely, but would warn of a correction to primary support at 6400.

FTSE 100

* Target calculation: 6700 + ( 6700 – 6400 ) = 7000

Dow Jones Euro Stoxx 50 is testing support at its 2009/2011 high of 3000. Rising 13-week Twiggs Momentum suggests a primary up-trend. Respect of support at 3000 is likely and follow-through above 3100 would confirm an advance to 3500*.

Euro Stoxx 50

* Target calculation: 3000 + ( 3000 – 2500 ) = 3500

November 12, 2013

TSX bullish consolidation

Canada’s TSX 60 is consolidating in a narrow range at its medium-term target of 770 after a strong spurt. This is a bullish sign and follow-through above 775 would signal a further advance to 800*. Rising 13-week Twiggs Money Flow suggests buying pressure. Reversal below 740 is most unlikely.

TSX 60

* Target calculation: 740 + ( 740 – 680 ) = 800

TSX 60 VIX is above 15 but still in the low risk range.

TSX 60 VIX

November 12, 2013

Dow signals fresh advance

Dow Jones Industrial Average broke resistance at 15700, ending the consolidation of recent months and signaling an advance to 16600*. Expect retracement to test the new support level in the next few weeks. Respect would confirm the advance. Penetration of the descending trendline on 13-week Twiggs Money Flow indicates medium-term buying pressure. Reversal below 15500 is unlikely, but would warn of another test of primary support at 14800.

Dow Jones Industrial Average

* Target calculation: 15700 + ( 15700 – 14800 ) = 16600

The S&P 500 is testing short-term resistance at 1775. Breakout would offer a short-term target of 1800*. Bearish divergence on 13-week Twiggs Money Flow appears to have ended. Reversal below 1750 is unlikely at present, but would indicate a correction to at least 1710.

S&P 500

* Target calculation: 1775 + ( 1775 – 1750 ) = 1800

CBOE Volatility Index (VIX) below 15 continues to indicate low market risk.

VIX Index

The Nasdaq 100 continues its accelerating up-trend, with Twiggs Money Flow indicating strong buying pressure. Short retracement is likely and breakout above 3400 would suggest another advance. Accelerating trends, or blow-offs, enjoy rapid gains but inevitably end with a sharp fall.

Nasdaq 100

* Target calculation: 2900 + ( 2900 – 2500 ) = 3400

November 11, 2013

NAB Convertible Pref issue | FIIG

From FIIG Newswire:

National Australia Bank Limited (ASX:NAB) has announced to the ASX the issue of a listed, floating rate convertible preference share (\”CPS II\”) with an indicative dividend of 325 to 340 bps over the bank bill swap rate. NAB is seeking to raise $750,000,000 for general corporate purposes. APRA has confirmed that the CPS II will count as additional Tier 1 Capital, supporting the NAB\’s regulatory capital requirements.

A welcome move to see the big four banks raising more Tier 1 capital. My view is that TBTF banks should have a minimum leverage ratio of 10 percent — more than double the current 4 to 5 percent.

Ending Too Big to Fail | The Big Picture

From an address by William C. Dudley, President of the NY Fed, to the Global Economic Policy Forum, November 8, 2013:

There is evidence of deep-seated cultural and ethical failures at many large financial institutions. Whether this is due to size and complexity, bad incentives or some other issues is difficult to judge, but it is another critical problem that needs to be addressed. Tough enforcement and high penalties will certainly help focus management’s attention on this issue. But I am also hopeful that ending too big to fail and shifting the emphasis to longer-term sustainability will encourage the needed cultural shift necessary to restore public trust in the industry.

Dudley calls for increased capital requirements to reduce the risk of failure as well as more robust procedures to reduce the impact of a single large failure:

The major initiative here is the single point of entry framework for resolution proposed by the Federal Deposit Insurance Corporation. Under this framework, if a financial firm is to be resolved under Title II of the Dodd-Frank Act, the FDIC will place the top tier bank holding company into receivership and its assets will be transferred to a bridge holding company. The equity holders will be wiped out and sufficient long-term unsecured debt will be converted into equity in the new bridge company to cover any remaining losses and to ensure that the new entity is well capitalized and deemed creditworthy. Subsidiaries would continue to operate, which should limit the incentives for customers to run. By assigning losses to shareholders and unsecured creditors of the holding company and transferring sound operating subsidiaries to a new solvent entity, such a “top-down” resolution strategy should ensure continuity with respect to any critical services performed by the firm’s subsidiaries and this should help limit the magnitude of any negative externalities.

November 5, 2013

Asia: India breaks out, ASX near target

India’s Sensex broke out above its 2007 and 2010 highs at 21000. Expect retracement to test the new support level. Respect would signal a primary advance with a target of 24000*. Rising 13-week Twiggs Money Flow suggests medium-term buying pressure. Reversal below 20500 is unlikely, but would warn of a correction to primary support at 18000.

Sensex

* Target calculation: 21000 + ( 21000 – 18000 ) = 24000

Japan’s Nikkei 225 again respected resistance at 15000. Declining 13-week Twiggs Money Flow suggests medium-term selling pressure. Breakout above 15000 would signal an advance to 17500*, but reversal below the October low is more likely and would test primary support at 13200, penetration of the rising trendline warning of trend weakness.

Nikkei 225

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

Singapore’s Straits Times Index is heading for another test of long-term resistance at 3300. Breakout would signal a primary advance to 3600*. But 13-week Twiggs Momentum below zero warns of a primary down-trend and reversal below the rising trendline would strengthen the signal. Breach of support at 3000 would confirm a primary down-trend.

Straits Times Index

* Target calculation: 3300 + ( 3300 – 3000 ) = 3600

China’s Shanghai Composite is consolidating below resistance at 2150/2160. Breakout below 2100 would signal a correction to primary support at 1950, while recovery above the upper trend channel at 2200 would suggest another advance; follow-through above 2250 confirming a primary up-trend. Declining 21-day Twiggs Money Flow indicates medium-term selling pressure, but respect of the zero line would suggest long-term support.

Shanghai Composite Index

Hong Kong’s Hang Seng is again testing resistance at 23500 on the weekly chart. Breakout would signal a primary advance, with a medium-term target of 24500 and a long-term target of 28000*. Follow-through above 24000 would confirm. Rising 13-week Twiggs Money Flow suggests medium-term buying pressure; a trough above zero would strengthen the signal. Reversal below 22500 is unlikely, but would warn of a correction to 21500 or the primary trendline.

Hang Seng Index

* Target calculation: 24000 + ( 24000 – 20000 ) = 28000

The ASX 200 found short-term support at 5390, short retracement suggesting buying pressure. Penetration of the descending trendline on 21-day Twiggs Money Flow, after a mild bearish divergence, would confirm this. Breakout above 5450 would test 5500, exceeding the target for the current advance. Respect of resistance remains as likely, however, and would warn of a correction to 5250/5300; confirmed if support at 5390 is broken. In the longer term, another Twiggs Money Flow trough above zero would suggest a healthy primary up-trend.

ASX 200

* Target calculation: 5300 + ( 5300 – 5150 ) = 5450

November 4, 2013

Europe tests key resistance levels

The monthly chart of the FTSE 100 is testing resistance at the 2007 high of 6750. Rising 13-week Twiggs Money Flow signals buying pressure. Breakout above 6750 would test the 1999/2000 high at 7000*. Respect of resistance (reversal below 6650) is unlikely, but would warn of a correction to primary support.

FTSE 100

* Target calculation: 6700 + ( 6700 – 6400 ) = 7000

Germany’s DAX found short-term resistance at 9000, but rising 13-week Twiggs Money Flow again signals buying pressure. Target for the current advance is 9300*. Reversal below 8500 is most unlikely, but would warn of a correction to the primary trendline around 8000.

DAX

* Target calculation: 8500 + ( 8500 – 7700 ) = 9300

Dax Volatility remains low, indicating bullish sentiment.

DAX

Dow Jones Euro Stoxx 50 is retracing to test support at its 2009/2011 high of 3050. Rising 13-week Twiggs Momentum continues to suggest a healthy up-trend. Respect of support at 3000 would signal another advance — a bullish sign for the European economy.

Euro Stoxx 50

* Target calculation: 2850 + ( 2850 – 2500 ) = 3200

November 4, 2013

Transport: Fedex improving outlook

Bellwether transport stock Fedex has risen dramatically in recent weeks, reflecting the improving outlook for economic activity.
Fedex

UPS has enjoyed a similar surge, as has Deutsche Post AG (which owns DHL).

Deutsche Post AG