UK & Europe Archives - Page 61 of 89

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

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.

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.

April 16, 2012

Europe’s Economic Suicide – NYTimes.com

Paul Krugman: If European leaders really wanted to save the euro they would be looking for an alternative course. And the shape of such an alternative is actually fairly clear. The Continent needs more expansionary monetary policies, in the form of a willingness — an announced willingness — on the part of the European Central Bank to accept somewhat higher inflation; it needs more expansionary fiscal policies, in the form of budgets in Germany that offset austerity in Spain and other troubled nations around the Continent’s periphery, rather than reinforcing it. Even with such policies, the peripheral nations would face years of hard times. But at least there would be some hope of recovery.

What we’re actually seeing, however, is complete inflexibility. In March, European leaders signed a fiscal pact that in effect locks in fiscal austerity as the response to any and all problems. Meanwhile, key officials at the central bank are making a point of emphasizing the bank’s willingness to raise rates at the slightest hint of higher inflation.

via Europe’s Economic Suicide – 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.

April 16, 2012

UK & Europe: Madrid in trouble

The monthly chart of the Madrid General Index highlights the extent of Spain’s problems, with the index breaking support at 750 and headed for its 2009 low of 700. A 63-day Twiggs Momentum peak below the zero line warns of a strong down-trend. Failure of 700 would signal a decline to 600*.

Madrid General Index

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

The broader Dow Jones Europe Index is undergoing a correction on the weekly chart. The sharp fall on 13-week Twiggs Money Flow warns of selling pressure. Failure of medium-term support at 240 is likely and would suggest another test of primary support at 210. Respect of support is unlikely but would indicate that the primary up-trend is intact.

Dow Jones Europe Index

The FTSE 100 is testing support at 5600. Respect would confirm the primary up-trend, indicating an advance to 6400*.
A 13-week Twiggs Money Flow trough above the zero line would signal continued buying pressure. Failure of support, however, would warn that the 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 12, 2012

Forex: Euro, Pound Sterling and Yen

The Euro is again testing support at $1.30. The short weekly candle at the support level warns of a downward breakout to test primary support at $1.26. A 63-day Twiggs Momentum peak below zero would suggest continuation of the primary down-trend. In the long term, failure of $1.26 would signal a decline to $1.18*.

Euro

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

Pound Sterling ran into resistance at $1.60 and failure of short-term support at $1.58 would test $1.56. Recovery of 63-day Twiggs Momentum above zero suggests reversal to a primary up-trend; but this would only be confirmed by breach of resistance at $1.62.

Pound Sterling

The US Dollar is correcting against the Japanese Yen, headed for a test of support at ¥80. Respect would indicate a primary up-trend; confirmed if resistance at ¥84 is broken. A 63-day Twiggs Momentum trough above zero would strengthen the signal.

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 7, 2012

"The Big Easing" by Daniel Gros | Project Syndicate

The banks that are parking their money [about €1 trillion] at the ECB receiving only 0.25% interest are clearly not the same ones that are taking out three-year loans [€1.15 trillion] at 1%. The deposits come largely from northern European banks mainly German and Dutch, and LTRO loans go largely to banks in southern Europe mainly Italy and Spain. In other words, the ECB has become the central counterparty to a banking system that is de facto segmented along national lines. The real problem for the ECB is that it is not properly insured against the credit risk that it is taking on. The 0.75% spread between deposit and lending rates yielding €7.5 billion per year does not provide much of a cushion against the losses that are looming in Greece, where the ECB has €130 billion at stake.

via “The Big Easing” by Daniel Gros | Project Syndicate.

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.