UK & Europe Archives - Page 60 of 88

May 10, 2012

German Adjustment – NYTimes.com

Paul Krugman: Germany believes that its successful adjustment was the result of its own virtue, but in reality it was successful in large part because of an inflationary boom in the rest of Europe.

And here’s the thing: the Germans are now demanding that the European periphery replicate its achievement (and actually surpass it, because the required adjustment is much bigger) without providing a comparably favorable environment — they’re demanding that Spain and others do what they never did, which is deflate their way to competitiveness.

This is a road to disaster.

via German Adjustment – NYTimes.com.

Colin Twiggs

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.

May 9, 2012

Forex: Euro and Pound Sterling

The euro broke support at $1.30, completing a bearish descending triangle on the weekly chart and signaling another test of primary support at $1.26. In the longer term, breach of $1.26 would offer a target of $1.17*. Respect of the zero line (from below) by 63-day Twiggs Momentum strengthens the bear signal.

Euro

* Target calculation: 1.26 – ( 1.35 – 1.26 ) = 1.17

Pound Sterling is in a strong primary up-trend against the euro, with 63-day Twiggs Momentum completing troughs high above zero. Target of €1.255* for the current advance is about to be broken.

Pound Sterling

* Target calculation: 1.215 + ( 1.215 – 1.175 ) = 1.255

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.

May 8, 2012

UK & Europe: France rejects austerity

Election of French Socialist Francois Hollande may lead to a similar rejection of austerity measures by Spain and Italy, creating a clear fault-line between the uncompromising German-led North and a more socialist French-led South. That could eventually lead to fracture of the euro-zone unless the two camps discover a new spirit of compromise. Be prepared for a rough ride.

The CAC-40 index rallied Monday and recovery above 3300 would indicate that the correction is over. Respect of the zero line by 13-week Twiggs Money Flow would signal buying pressure. Failure of support at 3100, however, would indicate another test of primary support at 2800.

France CAC-40 Index

Spain’s Madrid General Index continues in a strong primary down-trend, with 63-Day Twiggs Momentum oscillating below zero. Failure of support at the 2009 low of 700 would signal another primary decline.

Madrid General Index

* Target calculation: 750 – ( 900 – 750 ) = 600

63-Day Twiggs Momentum (below zero) also indicates a primary down-trend on Italy’s MIB Index but this week’s blue candle suggests support at 13500. Recovery above 15000 would signal another test of 17000. Failure of support, however, would offer a long-term target of 10000*.

Italy MIB Index

* Target calculation: 13500 – ( 17000 – 13500 ) = 10000

The German DAX continues to test the rising trendline and support at 6500. Rising 13-week Twiggs Money Flow suggests strong buying pressure. Respect of support would confirm the primary up-trend and test the 2011 high at 7600.

Germany DAX Index

London Stock Exchange was closed Monday. The FTSE 100 is again testing support at 5600 and failure would warn of another test of primary support at 5000/5050. Breach of the rising trendline would also signal that the up-trend is losing momentum. Retreat of 63-Day Twiggs Momentum below zero would warn of a primary down-trend.

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.

May 3, 2012

Forex: Pound Sterling strengthens against Euro

The euro is headed for another test of support at $1.30. Failure would complete a small bearish descending triangle on the weekly chart. Breach of primary support at $1,26 would offer a long-term target of $1.17*. Respect of the zero line (from below) by 63-day Twiggs Momentum would strengthen the signal.

Euro

* Target calculation: 1.26 – ( 1.35 – 1.26 ) = 1.17

Pound Sterling is in a primary up-trend against the euro, as indicated by 63-day Twiggs Momentum above zero. Target for the current advance is €1.255*.

Pound Sterling

* Target calculation: 1.215 + ( 1.215 – 1.175 ) = 1.255

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.

April 30, 2012

UK & Europe: Madrid at 2009 low

The monthly chart of the Madrid General Index is testing its 2009 low of 700. With unemployment rates (24.4 per cent) similar to the US Great Depression and more than half of Spaniards under 25 jobless, there is no recovery in sight. 63-Day Twiggs Momentum oscillating below zero indicates a strong primary down-trend. Failure of support at 700 would signal another primary decline.

Madrid General Index

* Target calculation: 750 – ( 900 – 750 ) = 600

Italy’s MIB Index is more resilient, with recovery of 13-week Twiggs Money Flow above zero indicating buying pressure. Expect another test of resistance at 17000.
Italy MIB Index
The CAC-40 monthly chart shows France in a similar fix. Failure of support at 3100 would indicate another test of primary support, close to the 2009 low of 2500. Recovery above 3600, however, would indicate another test of 4000 — especially if accompanied by recovery of 63-day Twiggs Momentum above 10%.
France CAC-40 Index

The German DAX respected support at 6500, confirming the primary up-trend. Rising 13-week Twiggs Money Flow indicates strong buying pressure. Expect another test of 7500.
Germany DAX Index

The FTSE 100 respected support at 5600 and breakout above 5800 would signal an advance to 6400*. The 13-week Twiggs Money Flow trough above the zero line indicates buying pressure. Reversal below 5600 is unlikely but would warn that the primary up-trend is weakening.

FTSE 100 Index

* Target calculation: 6000 + ( 6000 – 5600 ) = 6400

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.

April 28, 2012

Abundance of land, shortage of housing | Institute of Economic Affairs

Kristian Niemietz looks at how housing costs in the UK have exploded in recent decades. Real-terms house prices in 2011 were more than two-and-a-half-times higher than in 1975, with rent levels following suit. In the USA, Germany and Switzerland, real-terms house prices are still close to their 1975 levels.

· Housing affordability measures show housing to be unaffordable in every single one of the 33 regions in the UK.

· The main difference between the UK and its north-western European neighbours is not in demographics, but in completion rates of new dwellings.

· Empirical evidence from around the world shows that planning restrictions are the key determinant of housing costs.

via Abundance of land, shortage of housing | Institute of Economic Affairs.

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.

April 26, 2012

Forex: Euro and Pound Sterling

The euro continues to test medium-term support at $1.30. With the dollar currently “the best horse in the glue factory”, support is likely to fail, signaling a re-test of the primary level at $1.26. A 63-day Twiggs Momentum peak below zero would indicate continuation of the primary down-trend; failure of primary support would confirm.

Euro

* Target calculation: 1.26 – ( 1.35 – 1.26 ) = 1.17

Sterling is testing resistance at $1.62. Recovery of 63-day Twiggs Momentum above zero indicates a primary advance, but news that the UK has dipped back into recession may inhibit further gains. Reversal below the rising trendline would warn of another test of primary support at $1.53, while breakout above $1.62 would signal an advance to the 2011 high of $1.67.

Pound Sterling

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.

April 23, 2012April 18, 2024

UK & Europe: Madrid tests major support level

The monthly chart of the Madrid General Index shows the index testing support at its 2009 low of 700. 13-Week Twiggs Money Flow crossing below zero warns of selling pressure. Failure of support would signal a decline to 600*.

Madrid General Index

* Target calculation: 750 – ( 900 – 750 ) = 600

France’s CAC-40 found support at 3150 after a sharp correction on the weekly chart. Declining 13-week Twiggs Money Flow — and last week’s gravestone candlestick — warn of selling pressure. Failure of support is likely and would suggest another test of primary support at 2800.

France CAC-40 Index

Germany’s DAX is also undergoing a correction but found stronger support at 6500. 13-Week Twiggs Money Flow continues to indicate long-term buying pressure. Respect of support, indicated by follow-through above 6800 would signal a primary advance to 7900*. Failure of support at 6500 is unlikely and would warn that the primary up-trend is weakening.

DAX Index

* Target calculation: 7200 + ( 7200 – 6500 ) = 7900

The FTSE 100 remains in a descending broadening wedge pattern. Upward breakout would indicate an advance to the earlier peak of 6000. Recovery of 21-day Twiggs Money Flow above zero would strengthen the signal, while respect of the zero line (from below) would warn of continued selling pressure. Reversal below 5720 would indicate another test of primary support at 5600.

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.

April 19, 2012

Forex: Euro, Pound Sterling and Yen

The Euro is consolidating above support at $1.30. Failure would test primary support at $1.26. A 63-day Twiggs Momentum peak below zero would indicate continuation of the primary down-trend. In the long term, failure of $1.26 would signal a decline to the 2010 low of $1.19/$1.20*.

Euro

* Target calculation: 1.26 – ( 1.34 – 1.26 ) = 1.18

Pound Sterling is consolidating below resistance at $1.60. Upward breakout would indicate an advance to the 2011 high of $1.67 — confirmed if resistance at $1.62 is penetrated — while failure of short-term support at $1.58 would warn of another test of primary support at $1.53. 63-Day Twiggs Momentum above zero indicates a primary up-trend; but this would only be confirmed by breakout above $1.62.

Pound Sterling

The US Dollar is testing support at ¥80, against the Japanese Yen. Respect is likely and recovery above ¥82 would indicate a fresh primary advance. Penetration of resistance at ¥84 would confirm the primary up-trend already signaled by 63-day Twiggs Momentum above zero.

Japanese Yen

* Target calculation: 85 + ( 85 – 80 ) = 90

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.

April 18, 2012

Sowing Seeds of the Next Major Crisis – WSJ News Hub

Francesco Guerrera: “Prolonged intervention by the authorities is creating fundamental distortions in the financial markets. They are in my view going to create the next crisis.”

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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.