UK & Europe Archives - Page 54 of 88

August 7, 2012

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Colin Twiggs is a former investment banker with almost 40 years of experience in financial markets. He co-founded Incredible Charts and writes the popular Trading Diary and Patient Investor newsletters.

Using a top-down approach, Colin identifies key macro trends in the global economy before evaluating selected opportunities using a combination of fundamental and technical analysis.

Focusing on interest rates and financial market liquidity as primary drivers of the economic cycle, he warned of the 2008/2009 and 2020 bear markets well ahead of actual events.
He founded PVT Capital (AFSL No. 546090) in May 2023, which offers investment strategy and advice to wholesale clients.

August 7, 2012

Europe and Footsie recovering

Madrid General Index is testing resistance at 720. Breakout would complete a double bottom, offering a target of 840*. Bullish divergence on 63-day Twiggs Momentum indicates a resurgence, but we are some way off a recovery above zero which would signal a primary up-trend.

Madrid General Index

Dow Jones Europe Index displays a strong bullish divergence on 63-day Twiggs Momentum, indicating a (primary trend) reversal. Recovery above zero would strengthen the signal. Penetration of the descending trendline would suggest a test of resistance at 265.

Dow Jones Europe Index

The FTSE 100 is headed for a test resistance at 6000. A trough at zero on 13-week Twiggs Money Flow suggests buying pressure but expect strong resistance at 6000 because of the number of previous reversals at this level.

FTSE 100 Index

Colin Twiggs

Using a top-down approach, Colin identifies key macro trends in the global economy before evaluating selected opportunities using a combination of fundamental and technical analysis.

August 7, 2012

Italian's Job: Premier Talks Tough in Bid to Save Euro – WSJ.com

Only the ECB has the necessary firepower to move the market. Senior German officials say the ECB’s help is what [Italian premier Mario] Monti has really been after all along. The Italian leader is convinced that the June 28 summit provided political cover for the ECB to take bold action, in the knowledge that euro-zone governments—including Germany—won’t oppose it.

“I have no doubt that the night before the disintegration of the euro, the ECB will do whatever is necessary to save it,” Mr. Monti says. “The question is: Do we need to get to the night before?”

via Italian’s Job: Premier Talks Tough in Bid to Save Euro – WSJ.com.

Colin Twiggs

Using a top-down approach, Colin identifies key macro trends in the global economy before evaluating selected opportunities using a combination of fundamental and technical analysis.

August 2, 2012

Forex: Euro, Pound Sterling, Canadian Loonie, Australian Dollar, South African Rand and Japanese Yen

The Euro retreated from resistance at $1.24 to test support at $1.22. Downward breakout would test the 2010 low of $1.19. Declining 63-day Twiggs Momentum continues to indicate a strong down-trend.

Euro/USD

* Target calculation: 1.23 – ( 1.27 – 1.23 ) = 1.19

Pound Sterling broke short-term support at €1.27 against the Euro, warning of a correction to €1.25. Respect of support at €1.25, however, would suggest a healthy up-trend.

Pound Sterling/Euro

Canada’s Loonie is testing parity against the greenback. Breakout would advance to $1.02. Recovery of 63-day Twiggs Momentum above zero would indicate a primary up-trend, while a break above $1.02 would confirm.

Canadian Loonie/Aussie Dollar

The Aussie Dollar retreated from resistance at $1.05*. Reversal below $1.045 would test the rising trendline but penetration below $1.03 is unlikely. Recovery of 63-day Twiggs Momentum above zero suggests a primary up-trend.

Aussie Dollar/USD

* Target calculation: 1.05 + ( 1.05 – 1.02 ) = 1.08

The Aussie Dollar respected support at R8.50 South African Rand before rallying to R8.75. Breakout is likely and would offer a target of R9.00*.

Aussie Dollar/South African Rand

* Target calculation: 8.75 + ( 8.75 – 8.50 ) = 9.00

The Australian Dollar is consolidating mid-range (between ¥72 and ¥90) against the Japanese Yen. Breakout above ¥82.50 is likely and would test the upper range border, while reversal below ¥79.50 would test primary support. Recovery of 63-Day Twiggs Momentum above zero would strengthen the bull signal.

Aussie Dollar/Japanese Yen

Colin Twiggs

Using a top-down approach, Colin identifies key macro trends in the global economy before evaluating selected opportunities using a combination of fundamental and technical analysis.

August 1, 2012

Poles Apart – NYTimes.com

I enjoyed this comment on the NYtimes website by A Man from Poland in response to Paul Krugman’s criticism of Mitt Romney lavishing praise on the Polish economy. Especially because Krugman concludes: “Doesn’t anyone tell Romney to do his homework?”

Mr Krugman,

I see that you don’t know too much about situation in Poland.

Of course I agree that currency depreciation was one of main reasons of Poland’s relative resilience in the crisis.

But there were second very important reason – income tax cuts in 2008.

In 2008, the first time from 10 years we had income tax cut in Poland.

Till 2007 we had 19%, 30% and 40% progressive income tax rates. In 2008 19% tax rate was decreased to 18%, 30% was decreased to 18% and 40% tax rate (for the richest taxpayers) was reduced to 32%. So, we changed 19%-30%-40% progressive system into less progressive, lower income tax system 18%-32%.

In 2008 there was also social security tax reduction which additionally decreased labour cost in Poland.

So, thanks to income tax cuts and social security tax cuts we have maintained (roughly) employment rate and consumption level in Poland and it was second important reason of quite good situation in Poland.

via Poles Apart – NYTimes.com.

Colin Twiggs

Using a top-down approach, Colin identifies key macro trends in the global economy before evaluating selected opportunities using a combination of fundamental and technical analysis.

August 1, 2012

Spain Capital Outflows Reach Record Levels in Euro Crisis – SPIEGEL ONLINE

In the first five months of 2012, a total of €163 billion left the country, the figures [from the country’s central bank] indicate. During the same period a year earlier, Spain recorded a net inflow of €14.6 billion.

The outflow has resulted from domestic banks sending money abroad, foreign lenders pulling out cash and mostly non-resident investors dumping Spanish assets.

via Spain Capital Outflows Reach Record Levels in Euro Crisis – SPIEGEL ONLINE.

Colin Twiggs

Using a top-down approach, Colin identifies key macro trends in the global economy before evaluating selected opportunities using a combination of fundamental and technical analysis.

July 31, 2012

FT Alphaville » Negative rates as a precursor to the death of banking

Izabella Kaminska: The [European research] team at Morgan Stanley concludes:

Banks earnings have already come under significant pressure from the flattening of the yield curve. Unless negative real rates came with a material steepening of the curves (not our rates colleagues’ view), banks earnings would come under even greater pressure. In fact, the greatest risk our rates colleagues see would be for negative rates 2-3 years down the curve, in which case banks would need to re-price credit further. In our view, as banks’ confidence in loan growth and margins fell, so would their confidence on their capital plans and so lending would remain weak. We see Japan’s experience as good case study in this.

via FT Alphaville » Negative rates as a precursor to the death of banking.

Colin Twiggs

Using a top-down approach, Colin identifies key macro trends in the global economy before evaluating selected opportunities using a combination of fundamental and technical analysis.

July 31, 2012

Europe: DAX and Footsie buying pressure

Germany’s DAX is headed for a test of resistance at the 2012 high of 7200. A trough above zero on 13-week Twiggs Money Flow indicates strong buying pressure. We should see stubborn resistance at 7200 but also strong support at 6500 if there is a retracement.

DAX Index

The FTSE 100 is testing resistance at 5700 while 21-day Twiggs Money Flow bottoming above zero indicates (medium-term) buying pressure. Breakout would offer a target of 5900*.

FTSE 100 Index

* Target calculation: 5700 + ( 5700 – 5500 ) = 5900

Colin Twiggs

Using a top-down approach, Colin identifies key macro trends in the global economy before evaluating selected opportunities using a combination of fundamental and technical analysis.

July 30, 2012

Federal Spending Cutbacks Slow Recovery – WSJ.com

BEN CASSELMAN and CONOR DOUGHERTY: Recent economic data show that long before the fiscal cliff hits, federal spending already is falling — and taking a toll on the recovery…….State and local governments are projected to receive $20.8 billion in federal stimulus funds in the 2012 fiscal year, ending in September, down from a combined $180.7 billion in fiscal 2010 and 2011, according to the Government Accountability Office……At the same time, military spending has fallen for three straight quarters as wars in Iraq and Afghanistan have wound down and as the Pentagon prepares for further budget cuts.

via Federal Spending Cutbacks Slow Recovery – WSJ.com.

Colin Twiggs

Using a top-down approach, Colin identifies key macro trends in the global economy before evaluating selected opportunities using a combination of fundamental and technical analysis.

July 27, 2012

Forex: Euro, Pound Sterling, Yen, Aussie, Loonie, Rand

The euro is testing resistance at $1.23/$1.24 against the greenback. Breakout above resistance and the descending trendline would warn that the primary down-trend is weakening and a bottom is forming . Negative values on 63 -day Twiggs Momentum continue to indicate a primary down-trend and respect of resistance would favor another decline.

Index

* Target calculation: 1.205 – ( 1.240 – 1.205) = 1.170

Pound Sterling is retracing to find support against the euro. Friday’s doji signals uncertainty. Respect of €1.27 would mean that the up-trend is still accelerating, while respect of €1.255 would indicate a healthy trend.

Index

* Target calculation: 1.26 + ( 1.26 – 1.23 ) = 1.29

Canada’s Loonie is strengthening against the greenback on the weekly chart. Breakout above parity would confirm a test of $1.02*. Fluctuation of 63 -day Twiggs Momentum around zero, between 3% and -3%, would indicate a ranging market.

Index

The Aussie dollar is testing resistance at $1.045/$1.05 against the greenback. Breakout would offer an initial target of $1.08*. Recovery of 63 -day Twiggs Momentum above zero suggests a primary up-trend.

Index

* Target calculation: 1.05 + ( 1.05 – 1.02 ) = 1.08

The Aussie is also testing resistance at 82/82.50 Japanese yen. Breakout would offer an initial target of 84.50* and a medium-term target of ¥88.

Index

* Target calculation: 82 + ( 82 – 79.50 ) = 84.50

Against the South African Rand, the Aussie is retracing to test support at R8.50. Respect would offer an initial target of R9.00*. Rising 63 -day Twiggs Momentum continues to indicate a primary up-trend.

Index

* Target calculation: 8.75 + ( 8.75 – 8.50 ) = 9.00

Colin Twiggs

Using a top-down approach, Colin identifies key macro trends in the global economy before evaluating selected opportunities using a combination of fundamental and technical analysis.