Strong open-close reversal signal on Americas Petrogas [BOE], identified on March 1st. Great entry point on recovery above $4.00.
Australia: Hourly ASX 200
The ASX 200 Hourly chart shows a sharp rally and we can expect a test of 4300/4320 tomorrow. Breakout would signal an advance to 4450*. Reversal below the trend channel is unlikely, but breach of support at 4250 would warn of another correction.
* Target calculation: 4300 + ( 4300 – 4150 ) = 4450
Forex: Euro, Pound Sterling and Yen
The euro is weakening against the greenback, testing medium-term support at $1.30. Failure would indicate a test of primary support at $1.26 and continuation of the down-trend. Respect is unlikely, but would suggest a test of the declining trendline.
* Target calculation: 1.26 – ( 1.35 – 1.26 ) = 1.17
Pound Sterling rallied against the Aussie Dollar, testing the new resistance level at $1.50. The down-trend is likely to continue and breach of the rising trendline would warn of another decline, with an immediate target of $1.42*.
* Target calculation: 1.46 – ( 1.50 – 1.46 ) = 1.42
The US Dollar is approaching its target of ¥85 Japanese Yen. Expect retracement to confirm the new support level at ¥80, followed by an advance to ¥90*.
* Target calculation: 85 + ( 85 – 80 ) = 90
Forex: Australia, Canada and South Africa
A stronger greenback and weaker commodity prices are likely to depress resource-rich currencies. Canada’s Loonie stood up surprisingly well, mainly because of rising crude oil prices. 63-Day Twiggs Momentum recovered above zero, indicating a primary up-trend. Breakout above $1.01 would strengthen the signal, offering a target of the 2011 high at $1.06.
* Target calculation: 1.01 + ( 1.01 – 0.95 ) = 1.07
The Aussie Dollar weakened along with commodity prices. Failure of support at $1.04 would warn of a correction to primary support at $0.96. Penetration of the rising trendline and reversal of 63-day Twiggs Momentum below zero would strengthen the signal.
The Aussie Dollar found support at R8.00 South African Rand. Expect a rally to test the upper range border at R8.50, but failure of support would test the long-term trendline at R7.50*. Penetration of the trendline and/or reversal of 63-Day Twiggs Momentum below zero would warn of a primary down-trend.
* Target calculation: 8.00 – ( 8.50 – 8.00 ) = 7.50
Treasury yields surge
The yield on 10-year US Treasury Notes has surged to test resistance at 2.40 percent. Breakout would indicate a rally to the long-term trendline at 3.00 percent on the Monthly chart. Rising treasury yields signal that investors are migrating out of bonds and into stocks, especially when the Fed is attempting to suppress long-term rates.
S&P 500 and Nasdaq
An Hourly chart shows the S&P 500 Index consolidating below 1400. Breakout above the narrow flag would signal an advance to 1450*. Reversal below the trend channel is unlikely but would warn of retracement to 1340.
* Target calculation: 1300 + ( 1300 – 1150 ) = 1450
The Nasdaq 100 exceeded its initial target of 2650, now revised to 2750, and is due for a correction. Bearish divergence on 21-day Twiggs Money Flow indicates medium-term selling pressure. Expect a test of support at 2400.
* Target calculation: 2400 + ( 2400 – 2050 ) = 2750
Hong Kong & Shanghai
Hong Kong’s Hang Seng Index retreated Wednesday in response to a sharp fall in Shanghai. Bearish divergence on 21-day Twiggs Money Flow warns of a correction, but as long as the lower trend channel at 20,000 is respected the primary up-trend remains intact.
* Target calculation: 20000 + ( 20000 – 17500 ) = 22500
Dow Jones Shanghai Index fell sharply to test support at 295. Failure of support would warn of a correction.
Shanghai Composite Index shows a similar fall. Follow-through below 2380 would signal a correction to primary support at 2150.
Singapore: Straits Times Index
Singapore’s Straits Times Index gapped above resistance at 3000 today, confirming the primary up-trend, and is currently trading near 3020. Target for the initial advance is 3200*.
* Target calculation: 2900 + ( 2900 – 2600 ) = 3200
Canada TSX: Momentum trades
Bullish
- New Zealand Energy [NZ] ~ respected support at $3.00; breakout above $3.80 would confirm another primary advance.
- Rio Alto Mining [RIO] ~ narrow consolidation favors breakout above $4.70, signaling a new advance; support at $4.30.
- Roxgold [ROG] ~ good support at $1.90, breakout above $2.15 would signal a new advance.
Watch for breakout
- Tri-Oil Resources A [TOL] ~ narrow consolidation between $3.50 and $3.80 but strong bearish divergence on 21-day Twiggs Money Flow
- Argonaut Gold [AR] ~ strong resistance at $10.00, support at $9.00
- Atna Resources [ATN] ~ support at $1.25, resistance at $1.50.
- Northern Graphite [NGC] ~ 21-day Twiggs Money Flow below zero is bearish but ascending triangle below $2.20, breakout would signal a fresh advance.
- Pretium Resources [PVG] ~ breakout above $18.00 would signal continuation
- TAG Oil [TAO] ~ testing resistance at $10.00
- Americas Petrogas [BOE] ~ testing support at $4.00, respect would favor breakout above $4.50 and a fresh advance.
![Americas Petrogas [BOE]](https://i0.wp.com/www.incrediblecharts.com/images/2012/2012-03-12-ca-boe.png?w=1140&ssl=1)
- Coastal Energy [CEN] ~ recovered above $20.00, follow-through above $21.00 would confirm a fresh advance.
![Americas Petrogas [BOE]](https://i0.wp.com/www.incrediblecharts.com/images/2012/2012-03-12-ca-cen.png?w=1140&ssl=1)
Negative Watch
- Silvercrest Mines [SVL] ~ strong bearish divergence on 21-day Twiggs Money Flow followed by sharp drop to test support at $2.50.
- Madalena Ventures [MVN] ~ long correction, headed for test of $1.00.
Carmen Reinhart: Financial Repression – WSJ
Carmen Reinhart marks the rise of financial repression. “Faced with a private and public domestic debt overhang of historic proportions, policy makers will be preoccupied with debt reduction, debt management, and, in general, efforts to keep debt-servicing costs manageable. In this setting, financial repression in its many guises with its dual aims of keeping interest rates low and creating or maintaining captive domestic audiences will probably find renewed favor and will likely be with us for a long time.”