Countries & Regions Archives - Page 198 of 378

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

September 9, 2013

FTSE & DAX face stubborn resistance

The FTSE 100 followed-through above initial resistance at 6500, indicating another test of 6700/6750. Breakout above 6750 would offer a target of 7500*, but bearish 13-week Twiggs Money Flow continues to warn of selling pressure. Reversal below 6400 would warn of a test of primary support at 6000.

FTSE 100 Index

* Target calculation: 6750 + ( 6750 – 6000 ) = 7500

Germany’s DAX respected support at 8000, indicating another test of stubborn resistance at 8500. Declining momentum suggests the primary up-trend is slowing. Reversal below support at 8000 would confirm, while breakout above 8500 would offer a long-term target of 9000*.

DAX Index

* Target calculation: 8400 + ( 8400 – 7800 ) = 9000

September 9, 2013

Canada: TSX buying pressure

Canada’s TSX Composite is testing resistance at 12900 on the weekly chart. Rising 13-week Twiggs Money Flow indicates medium-term buying pressure. Breakout (above 12900) would signal a primary advance, with a long-term target of 14000*. Respect of resistance is unlikely, but would test support at 12400. The wild card is the Dow Industrial Average: if it signals a reversal, all bets are off.

TSX Composite Index

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

September 9, 2013

Dow warns of reversal but S&P 500 hesitates

Dow Jones Industrial Average bearish divergence on 13-week Twiggs Money Flow warns of a reversal. Failure of primary support at 14500/14600 would confirm. Recovery above 15000 would defer the test of primary support, but strong selling pressure should not be ignored.

Dow Jones Industrial Average

Friday’s long-legged doji candle on the S&P 500 (daily chart) indicates hesitancy. Follow-through above the descending trendline would suggest that the correction is over, while a fall below the longer-term rising trendline would warn that momentum is slowing and another test of primary support at 1560 is likely. Bearish divergence on 21-day Twiggs Money Flow indicates selling pressure. In the long-term, failure of primary support would offer a target of 1400*.

S&P 500 Index

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

VIX below 20, however, continues to suggest a bull market.
VIX Index

Rising 13-week Twiggs Money Flow and consolidation above the preceding peak at 3040/3050 on the Nasdaq 100 also favors continuation of the primary up-trend.

Nasdaq 100 Index

Signals are mixed at present, but a stronger bear signal on the Dow, or an upward spike on the VIX, would tilt probabilities towards a reversal.

September 8, 2013

Vickers calls for doubling of bank capital levels | FT.com

“It is not very sensible to run a market economy on the basis of a banking system that is 33 times leveraged, let alone 40 or 50 times leveraged,” Sir John [Sir John Vickers, Oxford academic who chaired the Independent Commission on Banking] told the Financial Times. He believes the right number is closer to 10 times, equivalent to a 10 per cent ratio.

That is a lot higher than the 3 per cent (33 times leverage) required by Basel III and the 4.1% (CBA) to 4.5% (WBC) of the big four Australian banks.