UK & Europe Archives - Page 62 of 88

March 19, 2012

Europe follows through

Dow Jones Europe Index followed through above Friday’s high of 262, confirming the breakout and signaling a primary advance to 310*. Rising 21-day Twiggs Momentum signals a strong trend. Immediate target for the breakout is 270, then expect further retracement to test the new (260) support level.

Dow Jones Europe Index

* Target calculation: 260 + ( 260 – 250 ) = 270; 260 + ( 260 – 210 ) = 310

The Hourly chart gives a more detailed perspective, with a sharp fall to test support at 260 followed by a surge through resistance at 262. 24-Hour Twiggs Momentum holding above zero reflects a healthy (secondary/medium-term) rally.

Dow Jones Europe Index Hourly Chart

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.

March 18, 2012

Europe on the rise

Dow Jones Europe Index broke through 260 to signal a primary up-trend. Respect of the zero line by 13-week Twiggs Money Flow confirms strong buying pressure. Target for the advance is 310*.

Dow Jones Europe Index

* Target calculation: 260 + ( 260 – 210 ) = 310

Italy’s MIB Index reflects a similar pattern, signaling an advance to 21000*.

FTSE MIB Index

* Target calculation: 17000 + ( 17000 – 13000 ) = 21000

The FTSE 100 is already in a primary up-trend. A trough high above zero on 13-week Twiggs Money Flow indicates strong buying pressure and a likely breakout above resistance at 6100.

FTSE 100 Index

* Target calculation: 5700 + ( 5700 – 5000 ) = 6400

The DAX shows similar strong buying pressure and breakout above the 2011 high of 7500 is likely.

DAX Index

* Target calculation: 6400 + ( 6400 – 5400 ) = 7400

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.

March 17, 2012

Not Out of The Woods Yet: Despite Progress, Euro Crisis Is Far From Over – SPIEGEL ONLINE

Christian Rickens: So has Greece been rescued and financial markets been tamed? Is the euro crisis a thing of the past? Unfortunately not. With their successes in the last few days, euro-zone politicians have done little more than bought themselves time. They must use this window to brace themselves for the next wave of the euro crisis which is about to crash down on Europe.

It’s already clear that the Greek economy can’t survive with a government debt to GDP ratio that will — at best — still be at 117 percent in 2020, especially given the record pace at which the country’s GDP is contracting. There is still no coherent strategy for making Greece competitive again inside the euro zone, or for raising the capital for the huge investments needed — let alone for the wholesale revamp of the country’s entire public administration.

And so Greece is likely to report the next set of disappointing budget figures in a few months, and the wrangling over a new debt cut and a new rescue package will start shortly afterwards……

The other euro-zone governments have at most a few more months, perhaps only a few weeks, before the situation in Greece worsens again……That means that Portugal, Spain and Italy, the three other problem countries in the south of the euro zone, must perform the magic trick of stimulating growth while reducing their budget deficits. That can only succeed with a lot of pragmatism — austerity without growth is as pointless as growth without austerity.

via Not Out of The Woods Yet: Despite Progress, Euro Crisis Is Far From Over – SPIEGEL ONLINE – News – International.

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.

March 15, 2012

Forex: Euro, Pound Sterling and Yen

The euro is weakening against the greenback, testing medium-term support at $1.30. Failure would indicate a test of primary support at $1.26 and continuation of the down-trend. Respect is unlikely, but would suggest a test of the declining trendline.

Euro/USD

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

Pound Sterling rallied against the Aussie Dollar, testing the new resistance level at $1.50. The down-trend is likely to continue and breach of the rising trendline would warn of another decline, with an immediate target of $1.42*.

Pound Sterling/USD

* Target calculation: 1.46 – ( 1.50 – 1.46 ) = 1.42

The US Dollar is approaching its target of ¥85 Japanese Yen. Expect retracement to confirm the new support level at ¥80, followed by an advance to ¥90*.

USD/Japanese Yen

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

March 12, 2012

Europe: Signs of a revival

Europe shows signs of a revival. Dow Jones Europe Index is testing resistance at 260. Breakout would signal a primary up-trend. Respect of the zero line by 13-week Twiggs Money Flow indicates long-term buying pressure. Target for the advance would be 310*.

Dow Jones Europe Index

* Target calculation: 260 + ( 260 – 210 ) = 310

FTSE 100 Index shows even stronger buying pressure on 13-week Twiggs Money Flow. Expect the correction to respect support at 5600, followed by an advance to 6100.

FTSE 100 Index

* Target calculation: 5700 + ( 5700 – 5200 ) = 6200

March 8, 2012

Forex: Euro and Yen weaken while Rand recovers

The Euro is retreating to test medium-term support at $1.30 on the weekly chart. Failure would mean a fall to primary support at $1.25/$1.26. 63-Day Twiggs Momentum holding below zero reinforces the primary down-trend.

EURUSD

* Target calculation: 1.25 – ( 1.35 – 1.25 ) = 1.15

Pound Sterling is ranging between $1.5650 and $1.6000 against the greenback. Upward breakout would signal a primary up-trend but 63-Day Twiggs Momentum below zero continues to warn of the opposite.

GBPUSD

The dollar respected the new support level at 80 Japanese Yen. Breakout above ¥82 would confirm the primary up-trend, with an initial target of ¥85.

USDJPY

* Target calculation: 80 + ( 80 – 75 ) = 85

The Aussie Dollar continues to test support at R8.00 South African Rand. Failure would offer an initial target of R7.50, at the rising trendline. Momentum is falling sharply and reversal of 63-day Twiggs Momentum below zero would warn of a primary down-trend.

AUDZAR

March 5, 2012

Spain Is Turning Into An Economic Tragedy

Marc Chandler: The new fiscal compact had just been signed last week, which includes somewhat more rigorous fiscal rule and enforcement, when Spain’s PM Rajoy revealed that this year’s deficit would come in around 5.8 percent of GDP rather the 4.4 percent target. This of course follows last year’s 8.5 percent overshoot of the 6 percent target.

The problem that for Spain is that the 4.4 percent target was based on forecasts for more than 2 percent growth this year. However, in late February, the EU cuts its forecast to a 1 percent contraction. This still seems optimistic. The IMF forecasts a 1.7 percent contraction, which the Spanish government now accepts.

This will be the third year in 5 that the Spanish economy contracts. Unemployment stands at an EU-high of 23.5 percent in February. The strong export growth seen in recent years, the best growth in the euro area, is stalling. Domestic demand has been hit by rising unemployment and government austerity…..

via Spain Is Turning Into An Economic Tragedy.

March 3, 2012

UK & Europe: Italy threatens breakout

Italy’s MIB Index is testing resistance at 17,000 after several weeks narrow consolidation — signaling continuation of the up-trend. Rising 13-week Twiggs Money Flow indicates buying pressure.

MIB Index

* Target calculation: 17,000 + ( 17,000 – 14,000 ) = 20,000

Germany’s DAX is testing medium-term resistance at 7000. Upward breakout is likely and would indicate a test of 7500*.

DAX Index

* Target calculation: 6500 + ( 6500 – 5500 ) = 7500

The FTSE 100 Index also encountered resistance — as indicated by short candles below 6000 over the past four weeks and the triangle pattern on 13-week Twiggs Money Flow. Breakout above 6100 would signal a fresh primary advance, while reversal below the rising trendline would warn of a correction to primary support at 5000.

FTSE 100 Index

* Long-term target calculation: 6000 + ( 6000 – 5000 ) = 7000

March 1, 2012

Heard on the Street: China Shifts Out of Dollars, World Doesn’t End – WSJ.com

In the 12 months to June 2011, dollar purchases accounted for just 15% of additions to China’s reserves.

That confirms hints from Beijing and Europe over the past year that China has ramped up purchases of European debt

via Heard on the Street: China Shifts Out of Dollars, World Doesn’t End – WSJ.com.

March 1, 2012

Forex: Europe and Japan

The Euro is in a primary down-trend despite the latest rally, headed for a test of the descending trendline. Expect retracement to test support at $1.32; breach of $1.30 would warn of another test of primary support (at $1.26).

Euro/US Dollar

* Target calculation: 1.32 – ( 1.42 – 1.32 ) = 1.22

Pound Sterling broke its descending trendline several weeks ago and is headed for a test of resistance at $1.62. Upward breakout is unlikely at present, but recovery of 63-day Twiggs Momentum above zero would be a bullish sign.

Pound Sterling/USD

The US Dollar is retracing to test the new support level after breaking long-term resistance at 80 Japanese Yen. Recovery of 63-day Twiggs Momentum above zero, after a long-term bullish divergence, indicates a primary up-trend. Expect a test of the 2011 high at ¥85.

US Dollar/Japanese Yen

* Target calculation: 80 + ( 80 – 75 ) = 85