Countries & Regions Archives - Page 204 of 383

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.

September 5, 2013

Forex: Euro weakens but Aussie, Yen resilient

The Euro followed through below $1.3150, after breaking support at $1.32, confirming a correction to primary support at $1.2750/1.2800. Reversal of 63-day Twiggs Momentum below zero would strengthen the signal.

Euro/USD

Sterling penetrated the descending trendline (weekly chart) against the euro, suggesting the primary down-trend is over. Breakout above €1.19 would complete a double bottom with a target of €1.24*. Recovery of 13-week Twiggs Momentum above zero also indicates a primary up-trend. Reversal below €1.16 is unlikely, but would warn the down-trend may continue; failure of primary support at €1.14 would confirm.

Sterling/Euro

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

The greenback broke out of its triangular pattern (weekly chart) against the Yen, but too close to the apex to have much significance. Follow-through above ¥101.50 would offer a long-term target of ¥114*. Reversal below ¥96 is unlikely, but would test primary support at ¥94.

USD/JPY

* Target calculation: 104 + ( 104 – 94 ) = 114

Canada’s Loonie is testing primary support at $0.9450 against the greenback. Respect, indicated by recovery above $0.96, would test the descending trendline (weekly chart) and resistance at $0.9750. Failure of support is as likely, however, and would warn of another decline.

Canadian Loonie

The Aussie Dollar penetrated its descending trendline (daily chart) against the greenback, suggesting the primary down-trend is weakening. Breakout above $0.92 would complete a double-bottom reversal with an initial target of $0.95*. Respect of resistance remains likely, however, and would signal another test of primary support at $0.89*.

Aussie Dollar

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

The Aussie penetrated its descending trendline (weekly chart) against the Kiwi, suggesting that the primary down-trend is over. Breakout above $1.16 would confirm, while reversal below $1.12 would signal another decline.

Canadian Loonie

September 5, 2013

Fed’s Fisher Slams Congress Over Fiscal Policy | WSJ

Rob Curran at WSJ reports on a speech by Dallas Fed President Richard Fisher:

Speaking at a luncheon hosted by financial-industry trade group the Dallas Estate Planning Council at the Dallas Country Club, Mr. Fisher said the central bank has done all it can to stimulate the U.S. economy. He said members of Congress–both Republicans and Democrats–have failed to do their part. Elected officials have “sold our children–and our grandchildren–down the river,” Mr. Fisher said. “We haven’t had a budget for five years; no one knows what their taxes are going to be; no one knows what spending is going to be.”

The Dallas Fed president has long maintained that the missing ingredient in the economic recovery is a sound fiscal policy.

via Fed’s Fisher Slams Congress Over Fiscal Policy – Real Time Economics – WSJ.

September 4, 2013

The BRICs party is over | Anders Aslund | Vox

Anders Åslund:

From 2000 to 2008 the world went through one of the greatest commodity and credit booms of all times. Goldman Sachs preached that the BRICs were unstoppable….

However, Genesis warns that after seven years of plenty, “seven years of famine will come and the famine will ravage the land”. Genesis appears to have described the combined commodity and credit cycle, from which the Brazil, Russia, India and China have benefited more than their due….

Read more at The BRICs party is over | vox.

September 3, 2013

Saul Eslake: 50 years of housing policy failure | | MacroBusiness

Leith van Onselen quotes Saul Eslake:

Research by Judy Yates of the University of NSW shows that home ownership rates among younger age groups declined dramatically between the 1991 and 2011 Censuses – from 56% to 47% among 25-34 year olds; from 75% to 64% among 35-44 year olds; from 81% to 73% among 45-54 year olds; and 84% to 79% among those over 55…

Eslake also nails one of my pet hates: federal/state intervention in the housing market to boost demand, driving up prices and fueling the housing bubble:

Eslake puts the recent failure of housing supply to keep up with demand down to two main factors, namely:

The decline in the provision of social housing; and

Restrictive state and local government planning schemes and upfront charging for development and infrastructure.

Eslake is particularly scathing of policies that boost demand, such as FHB Grants and negative gearing.

September 3, 2013

Sarah Palin: ‘We’re bombing Syria … and I’m the idiot?’ | Washington Times

Jessica Chasmar at The Washington Times:

“So we’re bombing Syria because Syria is bombing Syria? And I’m the idiot?” Mrs. Palin asked on Friday. “President Obama wants America involved in Syria’s civil war pitting the antagonistic Assad regime against equally antagonistic Al Qaeda affiliated rebels. But he’s not quite sure which side is doing what, what the ultimate end game is, or even whose side we should be on.”

September 3, 2013

GM and Toyota may follow Ford’s lead and shut plants in Australia – Quartz

Nandagopal J. Nair writes:

The biggest drag is is a strong Australian dollar, which is making local manufacturing uncompetitive compared to imports. Over the past 12 months the currency has traded about 30% above its three-decade average. Its strength has pushed up manufacturing costs, making Australia the third most expensive country to do business in, according to the IMF.

September 3, 2013

Global markets bearish but ASX, India find support

US markets are closed for Labor Day. The S&P 500 ended last week testing its rising trendline and support at 1630. Breach would reinforce the bearish divergence on 21-day Twiggs Money Flow, indicating a test of primary support at 1560. Recovery above the descending trendline is unlikely at present, but would warn the correction is ending. 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 suggests a bull market.
S&P 500 Index

The FTSE 100 closed above initial resistance at 6500. Follow-through would suggest the correction is over and another attempt at 6750 likely. Strong bearish divergence on 13-week Twiggs Money Flow, however, warns of selling pressure and breakout above 6750 is unlikely. Reversal below 6400 would warn of a test of primary support at 6000.

FTSE 100 Index

Germany’s DAX encountered stubborn resistance at 8500. Reversal below 8000 would test primary support at 7600, while breakout above 8500 would offer a target of 9000*.

DAX Index

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

Japan’s Nikkei 225 recovered above 13500 and follow-through above the descending trendline would suggest the correction is over and another test of resistance at 15000 is likely. Reversal below 13200, however, would indicate a test of primary support at 12500. Earlier bearish divergence on 13-week Twiggs Money Flow warns of long-term selling pressure.

Nikkei 225 Index

China’s Shanghai Composite is testing resistance at 2100/2120. Bearish divergence on 13-week Twiggs Money Flow warns of selling pressure. Reversal below 2050 would indicate another test of primary support at 1950. Breakout above 2200 and the descending trendline is unlikely, but would suggest that the down-trend is ending.

Shanghai Composite Index

India’s Sensex encountered strong support at 18000/18500, evidenced by the long tails on the weekly candles and rising 13-week Twiggs Money Flow. Expect another test of resistance at 20500. Follow-through above 19000 would strengthen the signal.

BSE Sensex Index

The ASX 200 is headed for a test of 5250 after breaking resistance at 5150. Rising 13-week Twiggs Money Flow indicates medium-term buying pressure. Breakout above 5250 would be a welcome sign, suggesting another primary advance, but respect of resistance and a lower peak on Twiggs Money Flow would warn of a reversal.

ASX 200 Index

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

August 31, 2013

John Mauldin: Effect of the taper

The last two times the Fed has ended a period of quantitative easing, the air has come out of the market balloon. Has this coming move been so telegraphed that the reaction will be different than in the past, or will we see the same result? Want to bet your bonus on it? Or your retirement?

~ John Mauldin

See graph at Mauldin Economics