Category: Countries & Regions

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China and South Korea

The Shanghai Composite Index is testing support at the 2010 low of 2350. 13-Week Twiggs Money Flow below zero warns of selling pressure. Failure of support is likely and would offer a long-term target of 1800*.

Shanghai Composite Index

* Target calculation: 2400 – ( 3000 – 2400 ) = 1800

Hang Seng Index rallied off support at 16000 and 13-week Twiggs Money Flow above zero indicates short/medium-term buying pressure. Expect a rally to test 19000, but the primary trend remains down and respect of resistance would indicate another test of 16000*.

Hang Seng Index

* Target calculation: 19 – ( 22 – 19 ) = 16

South Korea’s Seoul Composite Index is headed for a test of its upper trend channel. Bullish divergence on 13-week Twiggs Money Flow suggests a bear market rally. Expect another test of 1900. But the primary trend remains down and failure of support at 1650 would warn of a decline to 1500*.

Seoul Composite Index

* Target calculation: 1700 – ( 1900 – 1700 ) = 1500

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China buys its banks – macrobusiness.com.au

Central Huijin Investment Ltd, an arm of China’s sovereign wealth fund, bought shares in four major Chinese State-owned banks on the secondary market on Monday, the company told Xinhua.

The four banks include the Industrial and Commercial Bank of China (ICBC), Agricultural Bank of China (ABC), Bank of China (BOC) and China Construction Bank (CCB), according to the company.

The move is aimed at supporting the steady operation and development of major financial institutions and stabilizing their stock prices, the company said.

via China buys its banks – macrobusiness.com.au | macrobusiness.com.au.

Could be the first step in a bailout.

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India Sensex and Singapore STI

Bullish divergence on India’s SENSEX 13-week Twiggs Money Flow suggests a double bottom reversal. Breakout above 17200 would confirm, signaling a bear market rally with a target of 18600*. Note that the primary down-trend would remain downward.

SENSEX

* Target calculation: 17200 + ( 17200 – 15800 ) = 18600

Singapore’s Straits Times Index recovered above short-term resistance at 2650 after a sharp fall over several weeks. We could see a bear market rally to 2900, but the primary trend, as signaled by declining 63-day Twiggs Momentum, remains in a strong down-trend.

Straits Times Index

* Target calculation: 2700 – ( 2900 – 2700 ) = 2500

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Median U.S. Household Income Continues to Fall after the Recession – Financial News

Gordon W. Green Jr. and John F. Coder, former Census Bureau officials, wrote a report based on Census data that explored household incomes during and after the recession. They found that starting in June 2009, at the official end of the recession, up to June 2011, the inflation-adjusted median household income fell 6.7 percent to $49,909.

This is a significant drop from the 3.2 percent decrease experienced between Dec. 2007 and June 2009–the official period of the recession as determined by the National Bureau of Economic Research.

Researchers found a possible reason for this is a freeze in pay, which has remained stagnant or even dropped in many cases–a large number of people who lost their jobs during the middle or end of the recession remained out of work for months and took pay cuts in order to be hired again.

A separate study conducted by Henry S. Farber, an economics professor at Princeton, revealed that people who lost jobs in the recession and later found work earned an average of 17.5 percent less than they had in their old jobs.

via Median U.S. Household Income Continues to Fall after the Recession – Financial News for the Best Bank Rates | Go Banking Rates.

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Stocks’ Volatility Is Worrisome Sign – WSJ.com

Many investors are entering this week with fresh hopes the worst is over, after last week’s sudden stock-market rebound. But history suggests that in times of market turmoil, there is a risk that big, sudden gains like last week’s will prove temporary respites before stocks fall again. Head-snapping volatility, both steep drops and sharp gains, most often comes in times of market trouble. It suggests that, despite the bounce last week, the market isn’t healthy, says economic historian Richard Sylla of New York University’s Stern School of Business. “Financial markets become more volatile in periods of stress. People don’t know which way things are going to go, so you get these big up and down movements as people pile in and get out,” he says.

via Stocks’ Volatility Is Worrisome Sign – WSJ.com.

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DJ Asia update

Dow Jones India 30 Titans index displays a bullish divergence on 13-week Twiggs Money Flow, suggesting reversal to an up-trend. Breakout above 166 would complete a double bottom.

Dow Jones India 30 Titans

Dow Jones Singapore Index advanced cautiously towards the first line of resistance at 218. 21-Day Twiggs Money Flow holding below zero indicates medium-term selling pressure. Expect the primary down-trend to continue. Reversal below 202 would confirm.

Dow Jones Singapore

Japan is closed but South Korean buyers also displayed caution with narrow gains while 21-day Twiggs Money Flow again holds below zero.

Dow Jones South Korea

Dow Jones Shanghai index edged lower after resuming trading Monday. Declining 13-week Twiggs Money Flow indicates strong selling pressure.

Dow Jones Shanghai

Dow Jones HongKong index formed a doji star indicating hesitancy. Reversal below 340 would warn of a down-swing to 300. 63-Day Momentum declining below zero suggests a strong down-trend.

Dow Jones HongKong

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ASX 200 trend channel

The ASX 200 index is testing its upper trend channel. Low volume is typical for a Monday — before US and European markets open for the week — but the low range indicates caution on the part of buyers. Reversal below 4100 would indicate a down-swing to the lower trend channel, while follow-through above 4200 would suggest a bear market rally to 4500. The primary trend remains down, however, and reversal below 4000 would warn of a decline to 3500*.

ASX 200 Index

* Target calculation: 4000 – ( 4500 – 4000 ) = 3500

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FTSE 100 buyers scarce

The FTSE 100 index encountered resistance at 5400. Low volume indicates that buyers were scarce and another test of support at 5000 is likely. We are in a primary down-trend and failure of support would signal a decline to 4400*.

FTSE 100 Index

* Target calculation: 5000 – ( 5600 – 5000 ) = 4400

The DAX index is starting to rally on the weekly chart, with 13-week Twiggs Money Flow indicating medium-term buying pressure. Expect a test of 6000, but again we are in a primary down-trend and another test of 5000 is likely. Failure of support would signal a decline to 4000*.

German DAX Index

* Target calculation: 5000 – ( 6000 – 5000 ) = 4000

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TSX 60 finds support

Canada’s TSX 60 index found support between 620 and 650. A rally to test resistance at 730 is indicated, but the primary trend is down and 13-week Twiggs Money Flow continues to signal selling pressure. Reversal below 650 would warn of a decline to 580*.

TSX 60 Index

* Target calculation: 650 – ( 720 – 650 ) = 580

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NASDAQ bullish divergence

NASDAQ 100 index respected primary support at 2040 before rallying strongly on the weekly chart. Bullish divergence on 13-week Twiggs Money Flow indicates buying pressure. Breakout above 2340 would complete a double bottom. Reversal below 2000 is less likely, but would warn of a decline to 1700*. A word of caution: we are in a highly volatile market — do not act on signals without confirmation from other indexes.

NASDAQ 100 Index

* Target calculation: 2000 – ( 2300 – 2000 ) = 1700

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