Europe needs to create a tightly coordinated fiscal policy among nations, even though European voters are wary that would mean something akin to a United States of Europe. Ms. Lagarde, a former French finance minister who is in the honeymoon phase of her IMF presidency, has credibility in Europe. Her task: come up with a specific plan for a tighter union, which she could argue benefits ordinary Europeans.
Canada: TSX 60
The weekly TSX 60 chart respected resistance at 730 and is retreating to test support at 650/660. Decline of 13-week Twiggs Money Flow below zero warns of further selling pressure. Failure of support would offer a target of 590*.
* Target calculation: 660 – ( 730 – 660 ) = 590
India Singapore selling pressure
Dow Jones Total Stock Market (TSM) India Index is testing resistance at 1825. 21-Day Twiggs Money Flow mostly below zero warns of medium-term selling pressure. Expect resistance to hold followed by another test of support at 1650.
* Target calculation: 1650 – ( 1800 – 1650 ) = 1500
The weekly SENSEX chart shows a similar story: the index retracing to test resistance at 17500, but 13-week Twiggs Money Flow below zero warning of strong selling pressure. Reversal below 16000 would offer a target of 14500*.
* Target calculation: 16000 – ( 17500 – 16000 ) = 14500
Dow Jones Singapore Index retreated Monday. 21-Day Twiggs Money Flow below zero warns of medium-term selling pressure. Failure of support is likely and would offer a target of 200*.
* Target calculation: 220 – ( 240 – 220 ) = 200
Selling pressure on ASX 200
The ASX 200 is headed for another test of 4000. 21-Day Twiggs Money Flow holding below zero warns of strong medium-term selling pressure. Failure of support is likely and would offer a target of 3500*.
* Target calculation: 4000 – ( 4500 – 4000 ) = 3500
HongKong sell-off accelerates
Dow Jones HongKong Index reversed below 400, warning of another down-swing. The secondary trendline and declining 63-day Momentum indicate that the sell-off is accelerating.
* Target calculation: 400 – ( 450 – 400 ) = 350
Weekly chart of the Shanghai Composite Index shows a primary down-swing to test support at 2300*. Reversal of 13-week Twiggs Money Flow below zero would warn of rising selling pressure. Failure of support would test the 2008 low of 1700.
* Target calculation: 2650 – ( 3000 – 2650 ) = 2300
The sell-off in Asian markets will impact on others with a strong mining sector: Australia, Brazil, South Africa and Canada.
Weak Asian markets warn of continued selling pressure
Dow Jones Japan Index is testing long-term support at 50.00. 13-Week Twiggs Money Flow oscillating around zero indicates uncertainty; reversal below zero would warn of rising selling pressure. Breakout below 4800 would offer a target of 35.00*.
* Target calculation: 50 – ( 65 – 50 ) = 35
The Nikkei 225 Index is headed for a test of 7000* after breaking support at 9000 on the weekly chart.
* Target calculation: 9000 – ( 11000 – 9000 ) = 7000
Dow Jones South Korea Index is consolidating between 360 and 410 on the daily chart. 21-Day Twiggs Money Flow below zero warns of strong medium-term selling pressure. Downward breakout would offer a target of 290*.
* Target calculation: 360 – ( 430 – 360 ) = 290
DAX key reversal; FTSE rally fades
Germany’s DAX Index shows a strong key reversal [R] on the weekly chart. Expect a rally, but we are in a bear market and resistance at 6500 is likely to hold. Reversal below 5400 would warn of another down-swing.
* Target calculation: 5500 – ( 6500 – 5500 ) = 4500
The FTSE 100 fell at Monday’s open, but the weekly chart displays a particularly volatile consolidation edging higher. Breakout above 5400 would indicate a test of 5600/5700. Again, we are in a bear market; respect of resistance is likely and would warn of another test of 4800.
* Target calculation: 5000 – ( 5600 – 5000 ) = 4400
Bear rally and triple-witching
A narrow range with large volume often acts like a compressed spring — absorbing buying pressure before launching a sharp move in the opposite direction. The spike in volume [W] on Dow Jones Industrial Average was due to triple-witching hour on Friday, but we should nevertheless be wary of a fall below 11400, which would indicate another test of 10600.
* Target calculation: 11000 – ( 12000 – 11000 ) = 10000
The weekly chart of S&P 500 shows a similar bear rally. Expect a test of 1250/1260. But 63-day Momentum below zero reminds that the index is in a primary down-trend; a peak below the zero line would warn of another down-swing.
* Target calculation: 1125 – ( 1250 – 1125 ) = 1000
NASDAQ 100 Index displays a particularly strong rally, but this remains a bear market. Expect strong resistance at 2400. Failure of support would offer a target of 1700*.
* Target calculation: 2050 – ( 2400 – 2050 ) = 1700
Does the Euro Have a Future? by George Soros | The New York Review of Books
The German public still thinks that it has a choice about whether to support the euro or to abandon it. That is a mistake. The euro exists and the assets and liabilities of the financial system are so intermingled on the basis of a common currency that a breakdown of the euro would cause a meltdown beyond the capacity of the authorities to contain. The longer it takes for the German public to realize this, the heavier the price they and the rest of the world will have to pay.
via Does the Euro Have a Future? by George Soros | The New York Review of Books.
Strong dollar costs nation 90,000 jobs | The Australian
INDUSTRIES trying to win exports or fend off imports have shed 90,000 jobs in the past three months as they try to deal with the high Australian dollar.
The only parts of the economy that have been adding staff in any numbers are the state and commonwealth public sectors, health, professional services and the mining industry.
via Strong dollar costs nation 90,000 jobs | The Australian.