Equity funds had estimated inflows of $1.48 billion for the week, compared to estimated outflows of $30.01 billion in the previous week.
via $1.1B Comes Back into Mutual Funds Investing in U.S. Stocks.
$40B Flows Out of Mutual Funds. In One Week.
In the week ending August 10, $40.3 billion was pulled out of long-term mutual funds of all types, the Investment Company Institute reported.
NZ bucks trend
New Zealand is one of the few markets that is bucking the trend — its agriculture-based economy fairly insulated from the global down-turn. ENZL, the MSCI New Zealand ETF, recovered above its former primary support level at 31.50 after strong bullish divergence on 13-week Twiggs Money Flow. While technically still a bear market, retracement that respects the new support level of 31.50 would confirm a test of 34.
It’s a bear market
The Dow Jones Industrial Average rallied Tuesday on fairly light volume. Expect resistance at 11500. This is a bear market, with reactions to good news likely to be short — and declines from bad news severe. Target for the next decline is 10000*.
* Target calculation: 11000 – ( 12000 – 11000 ) = 10000
NZ50 bullish divergence
Bullish divergence on 21-day Twiggs Money Flow on the NZ50 Index signals buying support. Breakout above 3300 is possible, but the primary down-trend is unlikely to change, given the state of global markets.
* Target calculation: 3100 – ( 3300 – 3100 ) = 2900
Shanghai Composite confirms down-trend
The Shanghai Composite Index respected resistance at 2650, confirming the primary down-trend. Expect a test of 2350. 13-Week Twiggs Money Flow reversal below zero would warn of rising selling pressure. In the long term, failure of support at 2350 would offer a target of 1600*.
* Target calculation: 2400 – ( 3200 – 2400 ) = 1600
Monday’s long tail on the Hang Seng Index and higher volume indicate short-term support at 19000. Expect a rally to test the recent high at 20500.
* Target calculation: 19000 – ( 22000 – 19000 ) = 16000
India Singapore short-term support
The Sensex rallied Monday but on light volume. The sharp fall on 21-day Twiggs Money Flow below zero warns of strong medium-term selling pressure and support at 16000 is not expected to hold.
* Target calculation: 16500 – ( 17500 – 16500 ) = 15500
Monday’s long tail on the Straits Times Index also indicates short-term buying support. The sharp fall on 21-day Twiggs Momentum indicates a strong down-trend and support at 2700 is expected to fail.
* Target calculation: 2800 – ( 3000 – 2800 ) = 2600
Portugal Braces for Austerity Battle – WSJ.com
Portugal has little choice but to take tough steps. The country sought international help in April after failing to convince investors it was doing enough to shore up its shaky finances. In exchange for a €78 billion, three-year loan, Lisbon promised the European Union and the International Monetary Fund that it would slash its deficit and make structural changes to spur growth in key sectors.
The problem is these efforts are expected to prolong the economic slump at least two years and drive up unemployment, already at 12%.
India Singapore short-term buying
The DJ Total Stock Market (formerly DJ Wilshire) Index for India ($DWIN) gapped down on Monday’s open but closed with a long tail. Short-term buying is unlikely to withstand concerted selling pressure, signaled by 13-week Twiggs Money Flow below zero.
* Target calculation: 1820 – ( 1980 – 1820 ) = 1660
DJ Singapore also closed with a long tail, indicating short-term buying support — confirmed by higher volume. Again this is unlikely to withstand long-term selling pressure for more than a few days.
* Target calculation: 220 – ( 240 – 220 ) = 200
China commits to down-trend
The Dow Jones Shanghai Index reversed below primary support at 328, confirming the primary down-trend signal from the Shanghai Composite Index. The 21-day Momentum peak barely above zero strengthens the bear signal.
* Target calculation: 330 – ( 360 – 330 ) = 300
Dow Jones HongKong Index broke short-term support at 415, indicating a down-swing to its 2010 low at 365. The longer-term 63-day Momentum below zero strengthens the bear signal.
* Target calculation: 415 – ( 445 – 415 ) = 385