Countries & Regions Archives - Page 196 of 374

August 22, 2013

Global selling pressure

The S&P 500 Index broke medium-term support at 1650 and is headed for a test of the rising trendline. Respect would indicate the primary up-trend is intact, but bearish divergence on 13-week Twiggs Money Flow warns of selling pressure. This is also evidenced by the marginal new high in August. A test of primary support at 1560 is likely. Breach would offer a target of 1400*.

S&P 500 Index

* Target calculation: 1550 – ( 1700 – 1550 ) = 1400

Dow Jones Europe Index also displays marginal new highs in May and August. Penetration of the rising trendline indicates the up-trend is losing momentum — also indicated by bearish divergence on 13-week Twiggs Momentum. Reversal below support at 290 would strengthen the warning, but only failure of support at 270 would signal a trend reversal.

DJ Europe Index

China’s Shanghai Composite Index ran into strong resistance at 2100. Declining 13-week Twiggs Money Flow (below zero) warns of selling pressure. Reversal below 2050 would indicate another test of primary support at 1950, suggesting a decline to 1800*. Breakout above 2200 and the descending trendline is unlikely, but would signal that a bottom has formed.

Shanghai Composite Index

Japan’s Nikkei 225 broke medium-term support at 13500. Follow-through below 13250 would indicate a correction to primary support at 12500. Penetration of the rising trendline suggests that the primary up-trend is losing momentum. Earlier bearish divergence on 13-week Twiggs Money Flow also warns of a reversal. Recovery above the declining trendline is less likely, but would indicate the correction has ended.

Nikkei 225 Index

India’s Sensex broke primary support at 18500, following through below 18000 to remove any doubt. The primary trend has reversed after a triple top and now offers a target of 16500*. Declining 13-week Twiggs Money Flow confirms selling pressure. Recovery above 18500 is unlikely, but would warn of a bear trap.

BSE Sensex Index

* Target calculation: 18500 – ( 20500 – 18500 ) = 16500

The ASX 200 is consolidating in a broadening top around the 2010/2011 high of 5000. Correction to 4900 would be quite acceptable, garnering support for an advance to the upper border, but breach of 4900 would indicate a failed swing, warning of reversal to a primary down-trend. Failure of primary support at 4650 would confirm. Bearish divergence on 13-week Twiggs Money Flow indicates selling pressure; strengthened if the indicator reverses below zero. Respect of support at 5000 is less likely, despite the long tail on today’s candle, but would offer a target of 5300*.

ASX 200 Index

* Target calculation: 5150 + ( 5150 – 5000 ) = 5300

August 21, 2013

Forex: Euro and Aussie retreat

The Euro retreated after a false break above resistance at $1.34, suggesting a test of $1.32. Downward breakout would signal a test of primary support at $1.28, while recovery above $1.34 would indicate a primary advance to $1.40*. Momentum predominantly above zero favors an up-trend.

Euro/USD

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

The greenback is testing the upper border of its downward channel against the Yen. Breakout above ¥98.50 would suggest the correction is over and another test of ¥101.50 likely. Respect of resistance, however, would indicate a test of primary support at ¥94; breach of support at ¥96 would confirm.

USD/JPY

* Target calculation: 102 + ( 102 – 96 ) = 108; 94 – ( 102 – 94 ) = 86;

The Aussie Dollar retreated below $0.90 against the greenback, respect of the descending trendline suggesting another down-swing. Breach of support at $0.8850* would offer a medium-term target of $0.86*, but the long-term target remains at $0.80*.

Aussie Dollar

* Target calculations: 0.89 – ( 0.92 – 0.89 ) = 0.86; 0.95 – ( 1.10 – 0.95 ) = 0.80

August 19, 2013

Auto Makers Run Factories Full-Bore to Avoid New Investments | WSJ.com

Christina Rogers reports how more flexible union agreements have allowed automakers to wring additional production out of existing plants.

Nearly 40% of car factories in North America now operate on work schedules that push production well past 80 hours a week, compared with 11% in 2008, said Ron Harbour, a senior partner with the Oliver Wyman Inc. management consulting firm.

“There has never been a time in the U.S. industry that we’ve had this high a level of capacity utilization,” he said.

August 19, 2013

U.S. Manufacturers Gain Ground | WSJ.com

James R. Hagerty reports:

….Boston Consulting Group — a leading proponent of the idea that U.S. manufacturing will come roaring back — predicts a surge in U.S. exports, partly helped by lower energy costs and stagnating wages. In a report for release Tuesday, BCG says rising exports and “reshoring” of production to the U.S. from China “could create 2.5 million to five million American factory and service jobs associated with increased manufacturing” by 2020. That, BCG says, could reduce the unemployment rate, currently 7.4%, by as much as two to three percentage points.

August 19, 2013

Targeting the Wealthy Kills Jobs | WSJ.com

T.J. Rodgers compares job creation through private investment to government investment.

Even European socialist democracies are starting to understand that tax-and-spend policies kill jobs. For example, both Italy and Spain have repealed their incentive programs for solar energy along with their “green jobs” because the countries have calculated that for every job created by government investment in green energy, somewhere between 4.8 jobs Italy and 2.2 jobs Spain are lost because of the reciprocal cuts in private investment.

August 19, 2013

Bloated business of banking | The Australian

Adam Creighton discusses the likelihood of taxpayers being asked to bail out too-big-to-fail banks.

In Australia that probability is now 100 per cent. Standard & Poor’s, a ratings agency, gives Australia’s biggest four banks a AA rating explicitly because taxpayers will provide “extraordinary support” to their creditors in any crisis, an implicit guarantee worth more than one-quarter of the four’s annual profits.

Since 1995, the big four Australian banks’ assets, reflecting a global trend, have ballooned from 94 per cent of Australia’s national income to $2.86 trillion, or 190 per cent.

August 18, 2013

S&P 500 breaks support

The S&P 500 broke support at 1675 and is testing 1650. Bearish divergence on 21-day Twiggs Money Flow warns of selling pressure. Breach of 1650 would test the rising trendline around 1625. Respect (of the trendline) would indicate a healthy up-trend, while failure would test primary support at 1560.

S&P 500 Index

* Target calculation: 1680 + ( 1680 – 1560 ) = 1800

There is a lower trendline, however, on the monthly chart. Breach of support at 1560 would indicate a test of the (super) trendline.
S&P 500 Index

The VIX below 15 continues to indicate low market risk, favoring a primary up-trend. We need to watch this closely, however, as a spike above 0.20 may warn that something is amiss.

VIX Index

The TSX Composite Index rallied off support at 12400, indicating a test of resistance at 12900/13000. Rising 13-week Twiggs Money Flow above zero indicates medium-term buying pressure. Respect of resistance would suggest another down-swing to 12000/11750, but breakout above 12900/13000 is as likely and would offer a long-term target of 14000*.
TSX Composite Index

* Target calculation: 13000 + ( 13000 – 12000 ) = 14000

August 15, 2013

Gruen Nation: The Pitch

Great feature on Australian ABC’s Gruen Nation where ad agencies work up a concept to pitch to an imaginary client. Some are quite far-fetched, like selling holidays in Baghdad, but this week the pitch was a lot tougher: persuading voters at the upcoming election.

Click on the above image and scroll to 33:01 for The Pitch.

August 15, 2013

Forex: Euro, Aussie and Loonie strengthen

The Euro is consolidating between $1.32 and $1.34. Upward breakout would indicate a primary advance to $1.40*, while reversal below $1.32 would warn of another test of primary support at $1.27. Close oscillation of 13-week Twiggs Momentum around the zero line indicates hesitancy.

Euro/USD

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

Sterling respected primary support at €1.135/€1.140 against the euro. Recovery above €1.165 suggests that a bottom is forming. Penetration of the descending trendline would strengthen the signal. In the longer term, breakout above €1.19 would complete a double bottom with a target of €1.24. Recovery of 13-week Twiggs Momentum above zero would also indicate a primary up-trend. Reversal below €1.165, however, would warn the down-trend is likely to continue. Failure of primary support at €1.14 would confirm.

Sterling/Euro

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

The greenback is headed for a test of primary support at ¥94 against the Yen. Breach of short-term support at ¥96 would confirm. In the longer term, breach of primary support at ¥94 would signal a down-trend with an initial target of ¥86*, while recovery above ¥101.50 would indicate an advance to ¥108*.

USD/JPY

* Target calculation: 102 + ( 102 – 96 ) = 108; 94 – ( 102 – 94 ) = 86;

Canada’s Loonie is consolidating between $0.96 and $0.975 against the greenback. Upward breakout would penetrate the descending trendline, suggesting that a bottom is forming, while reversal below $0.96 would test primary support at $0.945.

Canadian Loonie

Short retracement of the Aussie Dollar against the greenback suggests buying pressure. Follow-through above $0.92 would test the descending trendline and resistance at $0.93. Breakout is unlikely, but would warn that the down-trend is ending. Reversal below medium-term support at $0.90 would warn of a decline to $0.87*, with a long-term target of $0.80*.

Aussie Dollar

* Target calculations: 0.90 – ( 0.93 – 0.90 ) = 0.87; 0.95 – ( 1.10 – 0.95 ) = 0.80

August 13, 2013

EconoMonitor | Japan’s Three Arrows―Will They Fly?

Jerry Schiff writes:

We see encouraging signs that the desired changes to the economy are beginning to take place. Growth in the first quarter rose by an impressive 4¼ percent seasonally adjusted annual rate. Equity markets are up by some 40 percent for the year. Exports appear to be recovering. Credit growth has turned positive. Consumer and business confidence have picked up. And Inflation expectations are beginning to rise…… But the transformation is far from complete. In particular, higher investment and wages — two keys for ultimate success — are not yet observed.