Category: Countries & Regions

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India & Singapore

India’s SENSEX index ran into resistance at 16500 today. 13-Week Twiggs Money Flow holding below zero warns of strong selling pressure. Expect another test of support at 16000. Failure would signal a down-swing to 14500.

SENSEX

* Target calculation: 16000 – ( 17500 – 16000 ) = 14500

The Straits Times Index weakened to 2700 today after yesterday’s sharp rally. 63-Day Twiggs Momentum declining below zero reminds that we are in a strong primary down-trend. Failure of support at 2700 would signal a decline to 2400*.

Straits Times Index

* Target calculation: 2650 – ( 2900 – 2650 ) = 2400

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ASX 200 compressed spring

Narrow range and strong volume signals strong opposition to the current rally. Like the release of a compressed spring, reversal below 4000 would lead to a sharp fall.

ASX 200 Index

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

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China, Hong Kong continue down-trend

Dow Jones Shanghai Index continued a down-swing Wednesday to test the lower border of its downward trend channel. 21-Day Twiggs Money Flow declining below zero warns of strong selling pressure.

Dow Jones Shanghai Index

The Shanghai Composite index is headed for support at its target of 2350. 63-Day Twiggs Momentum declining below zero reminds that we are in a primary down-trend. Expect some retracement or consolidation at support. Failure would warn of a decline to 2000*.

Shanghai Composite Index

* Target calculation: 2350 – ( 2700 – 2350 ) = 2000

Hang Seng Index found resistance at 18000 on Wednesday after rallying earlier in the week. The primary trend is down and 13-week Twiggs Money Flow (below zero) warns of selling pressure. Resistance at 19000 is expected to hold, followed by down-swing to 16000*.

Hang Seng Index

* Target calculation: 17500 – ( 19000 – 17500 ) = 16000

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S&P warns on Chinese property – macrobusiness.com.au

Chinese developers face an “increasingly severe” credit outlook, which may force them to cut prices and turn to costlier funding sources as sales weaken, Standard & Poor’s said.

A 30 percent decline in sales may leave many developers facing a liquidity squeeze, S&P said after conducting stress tests of the nation’s real estate companies…..

“The worst isn’t over for China’s real estate developers,” S&P analysts led by Frank Lu wrote in a report today. “Developers are bracing themselves for slower sales and lower property prices ahead.”

via S&P warns on Chinese property – macrobusiness.com.au | macrobusiness.com.au.

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Japan & South Korea

Bullish divergence on Japan’s Nikkei 225 index (13-week Twiggs Money Flow) warns of a bear market rally. Breakout above the upper channel of the broadening wedge pattern would confirm. The primary trend, however, remains downward; breakout below the lower channel at 8400 would warn of a down-swing to 7800*.

Nikkei 225 Index

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

The Seoul Composite is weaker on Wednesday after a sharp rally earlier in the week. 13-Week Twiggs Money Flow continues to threaten a break below zero. Breakout below the lower border of the broadening wedge formation would signal another primary decline.

Seoul Composite Index

* Target calculation: 1650 – ( 1900 – 1650 ) = 1400

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Europe: DAX and Footsie jump on bailout hopes

Germany’s DAX Index gapped above its secondary trend channel (or large flag) on hopes that the EFSF bailout rumor will materialize. The index is due for a secondary reaction, with bullish divergence on 21-day Twiggs Money Flow indicating medium-term buying pressure. Expect resistance at 6100. The bear market continues, however, and reversal below 5000 would offer a target of 4000*.

DAX Index

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

The FTSE 100 continues its narrow line between 5000 and 5450, with divergence on 21-day Twiggs Money Flow indicating (medium-term) buying pressure. Again, the bear market is likely to continue and failure of support at 5000 would signal another down-swing — with a target of 4400*.

FTSE 100 Index

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

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Iron forward market softens – Phat Dragon | Westpac

The iron ore market is beginning to exhibit some signs of modest
unease, with 3mth forwards giving up significant ground while spot
has moved about 5% lower. From an export profitability perspective,
falls in the Australian dollar and Brazilian real have more than
covered the US dollar spot decline. Even so, to Phat Dragon’s eye
a cyclical correction in the ferrous metals sphere appears to be
underway and price expectations should be ratcheting downwards.

Excerpt from Westpac’s Phat Dragon weekly chronicle of the Chinese economy

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US rally encounters resistance

Dow Jones Industrial Average tall shadow (or wick) on the latest candlestick [R] indicates rising selling pressure. With excitement about a European bailout deal fading, expect a test of support at 10600. Failure would indicate another down-swing, with a target of 10000*.

Dow Jones Industrial Average

* Target calculation: 11000 – ( 12000 – 11000 ) = 10000

S&P 500 Index shows continued consolidation between 1120 and 1220 on the weekly chart. 13-Week Twiggs Money Flow below zero indicates selling pressure. Failure of support at 1120 would test the 2010 low at 1020*/1000.

S&P 500 Index

* Target calculation: 1120 – ( 1220 – 1120 ) = 1020

NASDAQ 100 Index shows an evening star reversal warning, completed if price reverses below 2200. 63-Day Twiggs Momentum holding below zero reminds that we are in a primary down-trend. Breach of the lower trend channel would warn of another down-swing, with a target of 1750*.

NASDAQ 100 Index

* Target calculation: 2050 – ( 2350 – 2050 ) = 1750

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EU Super-Bailout Option Slips Away – WSJ

Financial markets rallied around the globe Monday as investors saw the first glimpse of real hope for containing the European debt crisis. Problem was that the lead advocates of the deal, the IMF’s Christine Lagarde and the European Commission’s Olli Rehn, are bureaucrats who don’t have to answer to electorates every few years.

Decidedly not on board were the actual governments of the 17 euro-zone nations. Euro-zone finance ministers came home from Washington doubting they could sell more risk to voters already grumbling at past and present tax money being put behind insolvent state treasuries in Greece, Portugal and Ireland.

via EU Super-Bailout Option Slips Away – The Source – WSJ.

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