The bear rally on the Brazilian Bovespa Index has run out of steam and we can expect another test of support at 48000. 13-Week Twiggs Money Flow below zero signals continued selling pressure. Failure would offer a target of 38000*.
* Target calculation: 48000 – ( 58000 – 48000 ) = 38000
The JSE bear rally respected resistance at 30000. Money Flow is stronger, but reversal below 28000 would offer a target of 26000*.
* Target calculation: 28000 – ( 30000 – 28000 ) = 26000
The ASX 200 Index is headed for another test of support at 4000. Volumes are far lower than the previous week, indicating a scarcity of buyers. Unless there is a significant upsurge on Tuesday, we are likely to see a downward breakout, offering a target of 3500*.
* Target calculation: 4000 – ( 4500 – 4000 ) = 3500
The FTSE 100 Index is testing support at 5000. Breakout is likely and would offer a target of 4400*.
* Target calculation: 5000 – ( 5600 – 5000 ) = 4400
Germany’s DAX Index is testing support at its 2010 low of 5400. 13-Week Twiggs Money Flow below zero warns of further selling pressure. Failure of support would offer a target of 4500*.
* Target calculation: 5500 – ( 6500 – 5500 ) = 4500
France has fallen well past its 2010 low, testing support at 3000. 13-Week Twiggs Money Flow again warns of further selling pressure. Breach of 3000 would test the 2009 low of 2500.
* Target calculation: 3000 – ( 3700 – 3000 ) = 2300
Secondary markets are as badly affected. The Amsterdam AEX Index fell below its 2010 low, while 13-week Twiggs Money Flow below zero warns of selling pressure.
* Target calculation: 300 – ( 340 – 300 ) = 260
Canada’s TSX 60 Index is falling sharply, headed for medium-term support at 665, but long-term support at 650 is just below. Breakout below 650 would warn of another down-swing, with a target of 580*.
* Target calculation: 650 – ( 720 – 650 ) = 580
The Nasdaq 100 broke support at 2050, warning of a down-swing to 1900*. Follow-through below last week’s low of 2040 would confirm. The latest peak on 21-day Twiggs Money Flow, barely breaking the zero line, indicates strong medium-term selling pressure.
* Target calculation: 2050 – ( 2200 – 2050 ) = 1900
The Dow is headed for a similar test: follow-through below 10600 would confirm a down-swing to 9600*. Higher volumes indicate the presence of buyers and failure of support would prove seller’s dominance.
* Target calculation: 10800 – ( 12000 – 10800 ) = 9600
The S&P 500 is testing support at 1100 on the weekly chart. Failure would signal a test of 1000. 13-Week Twiggs Money Flow below zero warns of further selling pressure.
* Target calculation: 1125 – ( 1250 – 1125 ) = 1000
[IMF China mission chief Nigel] Chalk argues that China faces a potent cocktail of ingredients pushing house prices up:
- High domestic savings, and limited opportunities to take cash offshore
- Limited domestic savings options and bank deposit rates below the rate of inflation
- No property tax or capital gains tax, which makes it cheap to buy and hold property
- Rapid growth, high wages and urbanization, which mean real demand continues to grow
The government’s crackdown on high housing prices has had some success. But Chalk believes that the restrictions on speculators introduced so far treat the symptoms, not the causes, of the malaise.
via Whack-a-Mole: IMF Not Impressed With China Bubble Management – China Real Time Report – WSJ.
Total estimated outflows from long-term mutual funds were $40.29 billion for the week ended Wednesday, August 10, the Investment Company Institute reported today.
[The] core problem at the heart of the euro zone is NOT a problem of “Mediterranean profligacy”. Many people, particularly in Germany, express the view that the Italian, Greek or Portuguese governments (and by association their people) are to blame for this crisis – accessing cheap loans from Northern European banks, not paying enough taxes, not working hard enough, etc…..
One thing is clear from the remarks that continue to emanate from Europe’s main policy makers. They do not understand basic accounting identities.
…….The European Monetary Union bloc as a whole runs an approximately balanced current account with the rest of the world. Hence, within Euroland it is a zero-sum game: one nation’s current account surplus is offset by a deficit run by a neighbor. And given triple constraints — an inability to devalue the euro, a global downturn, and the most dominant partner within the bloc, Germany, committed to running its own trade surpluses — it seems quite unlikely that poor, suffering nations like Greece or Ireland could move toward a current account surplus and thereby help to reduce its own government “profligacy”.
via New Economic Perspectives: ARE WE APPROACHING THE ENDGAME FOR THE EURO?.
Many are in shock that the S&P downgraded debt of the US from AAA. Not me. It was long overdue.
However, the S&P proved it was incompetent in the way it made the downgrade. Pray tell how can a rating agency make a $2 trillion error? The answer is obvious: sheer incompetence.
The irony is Moody’s and Fitch proved they are incompetent by not downgrading U.S. debt.
via In Praise of Timely, Blatant Incompetence | Mike Shedlock | Safehaven.com.
