Countries & Regions Archives - Page 193 of 374

September 17, 2013

Forex: Euro, Sterling and Aussie Dollar strengthen

The Euro found support at $1.31, the short retracement suggesting a breakout above resistance at $1.34/$1.3450. Breakout would offer a target of $1.40*. Rising 13-week Twiggs Momentum indicates a healthy primary up-trend.

Euro/USD

* Target calculation: 1.34 + ( 1.34 – 1.28 ) = 1.40

Sterling is doing even better, breaking through resistance at €1.19 after piercing the descending trendline. Breakout completes a double bottom reversal with a target of €1.24*. Recovery of 13-week Twiggs Momentum above zero also suggests a primary up-trend. Reversal below €1.16 would warn of a bull trap, but is most unlikely.

Sterling/Euro

* Target calculation: 1.19 + ( 1.19 – 1.14 ) = 1.24

The greenback is stabilizing against the Yen after losing momentum over the last 3 months. The recent rally respected resistance at ¥100/101 and another test of ¥96 is likely. Breakout above ¥101 would offer a target of ¥106*, but failure of support at ¥96 remains as likely, and would warn of a primary down-trend.

USD/JPY

* Target calculation: 101 + ( 101 – 96 ) = 106

Canada’s Loonie is headed for a test of the descending trendline and resistance at $0.9750. Bullish divergence on 13-week Twiggs Momentum favors a breakout, while recovery above zero would suggest a primary up-trend. Breakout would also complete a double-bottom reversal, with a target of parity*. Reversal below $0.96 is unlikely, but would warn of another test of primary support at $0.9450.

Canadian Loonie

* Target calculation: 97.5 + ( 97.5 – 94.5 ) = 100.5

The Aussie Dollar also completed a double-bottom reversal against the greenback — this time on a daily chart — offering a target of $0.95*. Follow-through above $0.93 confirms the signal. Reversal below $0.92 is unlikely, but would warn of another test of primary support at $0.89.

Aussie Dollar

* Target calculations: 0.92 + ( 0.92 – 0.89 ) = 0.95

The Aussie continues to weaken against its Kiwi neighbour. Respect of primary support at $1.12 and recovery above the descending trendline, however, would warn that a bottom is forming. Breakout above $1.16 would confirm, offering a target of $1.20*.

Kiwi Dollar

* Target calculations: 1.16 + ( 1.16 – 1.12 ) = 1.20

September 17, 2013

Higher Bank Capital Requirements are Necessary but not Sufficient to Prevent the Next Crisis | naked capitalism

Bill Black explains why higher capital requirements for banks is only part of the solution. Capital is simply an accounting measure of Assets minus Liabilities and bankers are not above gaming this to their advantage.

….There were hundreds of Office of Thrift Supervision examiners whose opinions repeatedly proved vastly superior to the economists’ predictions during the S&L debacle. Akerlof and Romer concluded their 1993 article with these sentences in order to emphasize this message to their peers.

The S&L crisis, however, was also caused by misunderstanding. Neither the public nor economists foresaw that the [deregulation] of the 1980s were bound to produce looting. Nor, unaware of the concept, could they have known how serious it would be. Thus the regulators in the field who understood what was happening from the beginning found lukewarm support, at best, for their cause. Now we know better. If we learn from experience, history need not repeat itself. (Akerlof and Romer 1993: 60)

Larry and Janet: please listen to the regulators in the field. Please end Ben Bernanke’s practice of placing economists in charge of Fed supervision. The Fed’s economists are a major source of the Fed’s problems….. the solution needs to come from the people in the field. That is particularly true with regard to detecting systemic risks.

September 16, 2013

Asian markets and ASX cautious

Japan’s Nikkei 225 Index broke its descending trendline, indicating the correction is over. Breakout above 15000 would signal a primary advance to 18000*. Recovery of 13-week Twiggs Money Flow above 30% would support this. Reversal below 13000 is now unlikely.

Nikkei 225 Index

China’s Shanghai Composite breached its descending trendline at 2200, indicating the down-trend is over. A long wick (or shadow) on last week’s candle, however, suggests resistance — and reversal below 2150 and the rising trendline would warn of a bull trap. But rising 13-week Twiggs Money Flow continues to signal medium-term buying pressure. Follow-through above 2350 is likely, and would indicate a test of 2450.

Shanghai Composite Index

India’s Sensex also displays a long wick on last week’s candle. Expect strong resistance at 20500. Respect would indicate another test of primary support at 18000. Rising 13-week Twiggs Money Flow indicates medium-term buying pressure, but long-term direction is unclear.

BSE Sensex Index

The ASX 200 is cautiously testing long-term resistance at 5250. Europe is bullish and Asian markets are rising, but the Dow and S&P 500 remain mildly bearish. Respect of resistance at 5250, indicated by reversal below 5150 and the rising trendline, would present another bearish divergence on 13-week Twiggs Money Flow, indicating long-term selling pressure. Breakout above 5250, however, would signal another primary advance, with a long-term target of 5750*.

ASX 200 Index

* Target calculation: 5250 + ( 5250 – 4750 ) = 5750

September 16, 2013

TSX finds stubborn resistance

Canada’s TSX Composite retreated from stubborn resistance at 12900 on the weekly chart. 13-Week Twiggs Money Flow turned down, indicating medium-term selling pressure. Another trough above zero, however, would suggest a primary up-trend. Breakout above 12900 would offer a long-term target of 14000*, but breach of support at 12400 remains as likely — and would signal a decline to 11750.

TSX Composite Index

* Target calculation: 12900 + ( 12900 – 11800 ) = 14000

September 16, 2013

Europe: Unleash the bulls

Spain’s Madrid General Index broke resistance at 900, indicating a long-term advance to 1050* (960* in the medium-term). Rising 13-week Twiggs Money Flow indicates buying pressure. Reversal below 840 is unlikely, but would warn of a bull trap.

* Target calculation: 900 + ( 900 – 750 ) = 1050; 900 + ( 900 – 840 ) = 960

Germany’s DAX is similarly testing resistance at 8500. Breakout would offer a medium-term target of 9000* and a long-term target of 9500*. Recovery of 13-week Twiggs Momentum above 10% would also signal continuation of the primary up-trend.
DAX Index

* Target calculation: 8500 + ( 8500 – 8000 ) = 9000; 8500 + ( 8500 – 7500 ) = 9500

France’s CAC-40 is testing resistance at 4120. Breakout would offer a medium-term target of 4300*, but follow-through above its 2011 high at 4200 would also confirm a long-term advance to 4500*. Reversal below 3900 is unlikely but would warn of a bull trap.
CAC-40 Index

* Target calculation: 4100 + ( 4100 – 3900 ) = 4300; 4050 + ( 4050 – 3600 ) = 4500

Italy’s MIB Index is also testing resistance, at 17700. Money Flow indicates strong buying pressure and breakout above 18000 would signal a long-term advance to 20000*. Reversal below 16500 is most unlikely, but would again warn of a bull trap.

* Target calculation: 17500 + ( 17500 – 15000 ) = 20000

The FTSE 100 is far more subdued, encountering resistance at 6600 after an end to the recent correction. Follow-through above 6700 would signal a medium-term advance to the 1999 high of 7000*, but reversal below 6500 would warn of another test of medium-term support at 6400. Failure of 6400, while unlikely, would test primary support at 6000.
FTSE 100 Index

September 16, 2013

Imbalances in the Australian housing market | Chris Joye

Chris Joye from the Financial Review warns on Radio National that imbalances that may be developing in the Australian housing market:

Hat tip to Leith van Onselen at Macrobusiness.com.au who comments:

“My only observation is that governments of all persuasions have for too long abrogated their responsibilities for housing policy to the RBA – allowing affordability concerns to be addressed via continuous lowering of interest rates, rather than addressing the underlying causes of poor affordability through supply-side and taxation reform.”

September 15, 2013

Dow, S&P 500 selling pressure but VIX bullish

Dow Jones Industrial Average put in a strong blue candle last week, but 13-week Twiggs Money Flow bearish divergence continues to warn of a reversal. Exercise caution until there is a breakout above the August high of 37% on TMF following an index breakout above 15660. Failure of primary support at 14500 would confirm a reversal, but continuation of the up-trend now seems as likely.

Dow Jones Industrial Average

The S&P 500 displays a similar bearish divergence on the daily chart, indicating selling pressure. 21-Day Twiggs Money Flow is now rising and follow-through above the July high at 23% would negate the warning. As would breakout above 1710 on the index chart, signaling a long-term advance to 1900*. Respect of resistance remains as likely, however, and reversal below 1670 would test the then primary support level at 1630.

S&P 500 Index

* Target calculation: 1710 + ( 1710 – 1630 ) = 1890

Despite the bearish divergences, VIX below 20 continues to suggest a bull market.
VIX Index

September 12, 2013

US & China lift ASX

The S&P 500 rallied strongly this week despite a weak bearish divergence on 13-week Twiggs Money Flow warning of selling pressure. Recovery above 1700 would indicate another advance, while a new August high on Twiggs Money Flow would further strengthen the signal, offering a target of 1850*. Reversal below 1630 is unlikely, but would re-test primary support at 1560.

S&P 500 Index

* Target calculation: 1700 + ( 1700 – 1550 ) = 1850

Dow Jones Industrial Average displayed a stronger bearish divergence on 13-week Twiggs Money Flow, increasing the likelihood of reversal below 14800. But positive sentiment is growing and recovery above 15650 now seems as likely.
S&P 500 Index

China’s Shanghai Composite penetrated resistance at 2200 and the descending trendline, suggesting that the down-trend is ending. Reversal below the rising trendline would warn of another correction to test primary support at 1950, but breach of support is now less likely. Rising 13-week Twiggs Money Flow indicates medium-term buying pressure; a trough above zero would strengthen the signal.

Shanghai Composite Index

The ASX 200 is testing resistance at 5250, buoyed by positive sentiment in China and the US. Breakout would suggest a primary advance, but a lower peak on 13-week Twiggs Money Flow would continue to warn of selling pressure. Reversal below 5150 remains as likely, and would test medium-term support at 4900/5000.

ASX 200 Index

* Target calculation: 5250 + ( 5250 – 4750 ) = 5750

September 9, 2013

Why this is a bad time to win an election | Business Spectator

Prof. Steve Keen writes:

So what could the future hold for Prime Minister Abbott? Here I have a hunch that he’ll end up suffering a similar fate, not to the previous Liberal leader he admires – John Howard – but to ….. Malcolm Fraser.

Fraser, as noted, had the good fortune to take over from Whitlam after the bursting of the debt bubble was largely over, but the bad fortune that the revival in Australia’s bubble was considerably more anaemic than America’s. Abbott could well find himself experiencing a similar double-edged sword of fate. He will take over when the deleveraging that caused the GFC has come to a temporary halt, and demand will be rising in the US….. But this rise could peter out even more quickly than it did for Fraser, leading to anaemic economic performance that will be blamed on the politician rather than the times.

September 9, 2013

Asian markets lift the ASX 200

Dow Jones Japan Index jumped today on Tokyo’s success in its bid for the 2020 Olympics. Follow-through above the descending trendline indicates the correction is over and a test of 81.50 likely. Upward breakout would signal continuation of the primary up-trend. Reversal below 73.50 is unlikely, but would warn of a test of primary support at 69.00.

Dow Jones Japan Index

China’s Shanghai Composite breached resistance at 2100, indicating a test of the descending trendline at 2200. Rising 13-week Twiggs Money Flow suggests medium-term buying pressure. The primary trend remains down, however, and reversal below the rising trendline would warn of another test of primary support at 1950. In the longer-term, breakout above the descending trendline is unlikely, but would suggest that the down-trend has ended.

Shanghai Composite Index

India’s Sensex rallied sharply after finding support at 18000/18500. Follow-through above 19500 would confirm another test of resistance at 20500. Rising 13-week Twiggs Money Flow indicates medium-term buying pressure. Reversal below 18500 is unlikely, but would signal a primary down-trend.

BSE Sensex Index

Rising Asian markets, especially China, are lifting the ASX 200, but weakness on the Dow or S&P 500 could reverse this. Recovery above 5150 and respect of the rising trendline suggest another test of resistance at 5250. Rising 21-day Twiggs Money Flow indicates short/medium-term buying pressure. Breakout above 5250 would signal another primary advance. Respect of resistance remains as likely, however, and reversal below 5000 would warn of another test of primary support at 4650.

ASX 200 Index

* Target calculation: 5250 + ( 5250 – 4650 ) = 5850