US & Canada Archives - Page 136 of 173

June 11, 2012

Fedex threatens support

Bellwether transport stock Fedex completed a double top reversal, with a break of the neckline at $88, and is now consolidating between $85 and $90. Retreat of 63-day Twiggs Momentum below zero warns of a primary down-trend. Failure of support at $85 would confirm, suggesting that economic activity is slowing.

Fedex

* Target calculation: 85 – ( 95 – 85 ) = 75

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.

June 11, 2012April 18, 2024

S&P 500 engulfing candle

Monday’s engulfing candle [R] on the S&P 500 warns of reversal to re-test support at 1270. Respect of the zero line (from below) by 21-day Twiggs Money Flow would indicate strong medium-term selling pressure. Failure of support would offer a target of 1200*.

S&P 500 Index

* Target calculation: 1270 – ( 1340 – 1270 ) = 1200

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.

June 8, 2012

S&P 500: It's all on the price chart

All indicators do is highlight information that is already visible on the price chart. That is why you need to be careful making decisions based solely on an indicator — because when you summarize (information) you sacrifice. 63-Day Twiggs Momentum displays a bearish divergence, with declining peaks over the last two years while the index has been rising. Careful study of the price chart reveals the same information: a healthy trend should display symmetrical, equally-weighted corrections and advances, you can tell momentum is slowing when advances are weaker and corrections stronger. A trend reversal would only be clear on the monthly chart if the S&P 500 crossed below support at 1100, but declining momentum should warn well in advance that it is forming a top. Recovery above 1400 is unlikely, but would signal that the trend has regained momentum — especially if the Fed introduces QE3.

S&P 500 Index

The Nasdaq 100 is also losing momentum, but slightly. Respect of support at 2400 would indicate a healthy up-trend. Likewise a trough above zero on 63-day Twiggs Momentum.

Nasdaq 100 Index

* Target calculation: 2800 + ( 2800 – 2400 ) = 3200

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.

June 8, 2012

Canada: TSX 60 head and shoulders

Canada’s TSX 60 Index threatens to complete a large head and shoulders reversal with a break below support at 640. The first shoulder is in April 2010 and the second in March 2012. The recent iceberg on 63-day Twiggs Momentum warns of a primary down-trend. Failure of support would offer an immediate target of 560* and a long-term target of 460*.

TSX 60 Index

* Target calculation: 640 – ( 720 – 640 ) = 560; 640 – ( 820 – 640 ) = 460

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.

June 6, 2012

Stiglitz, Conard Debate Income Inequality

Some sweeping generalizations from Stiglitz and Conard denial that the Fed was architect of the 2007/2008 asset bubble but some interesting insights from both parties.

http://youtu.be/U4T2aqZyM9w

Edward Conard, a former managing director at Bain Capital LLC, and Nobel Prize-winning economist Joseph Stiglitz, talk about the U.S. economy and income inequality. They speak with Betty Liu on Bloomberg Television’s “In the Loop.”

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.

June 5, 2012

Ron Paul v. Paul Krugman: Austrian v. Keynesian

Aired on Bloomberg TV 4-30-2012 Ron Paul vs Paul Krugman Debate

Paul Krugman is simply wrong about needing the government to set interest rates. The market would do a better job of managing demand and supply. Where government is needed is to regulate the banks and prevent excessive debt growth by the banks.

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.

June 4, 2012

US: S&P 500 and Nasdaq break support

The S&P 500 broke medium-term support at 1290/1300 with a strong red candle on the back of weaker job numbers. A 21-Day Twiggs Money Flow peak below zero warns of selling pressure. Expect a test of primary support at 1150.

S&P 500 Index Daily Chart

On the weekly chart, Nasdaq 100 is headed for support at 2400 after breaching 2480. Penetration of the rising trendline warns that the primary up-trend is weakening. Reversal of 63-day Twiggs Momentum below zero would strengthen the signal, suggesting a primary down-trend.

Nasdaq 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.

June 3, 2012

US banks face squeeze

Rising short-term interest rates (represented by 3-month Treasury yields on the chart below) caused negative yield differentials in 2006/2007 which led me to warn of an economic down-turn. Yield differentials are calculated by subtracting short-term (3-month) yields from long-term (10-year) yields. Banks borrow mostly at short-term rates and lend at long-term rates, generating a profitable interest margin. But when the yield differential turns negative, bank interest margins are squeezed, forcing them to contract lending. A lending contraction shrinks consumption + investment and sends the economy into a tail-spin.

Ten-Year Treasury Yield and Differential with Three-Month Yields

Negative yield differentials (or yield curves) are normally caused by rising short-term rates as in 2006/2007, but now we are witnessing the opposite phenomenon. Short-term rates are near zero, but falling long-term rates are starting to squeeze the yield differential from the opposite end. The situation is not yet desperate but a further decline in long-term yields would shrink bank interest margins. Fed initiation of QE3, purchasing additional long-term Treasuries, is likely to drive long-term rates lower and exacerbate the problem. The resulting contraction in bank lending would cause another economic down-turn.

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 31, 2012

EconoMonitor » U.S.-China Trade War in the Offing?

China wants to develop what it sees as key industries by giving Chinese companies a leg up in both the Chinese and global market. Its trading partners don’t want to see their firms placed at a disadvantage, and in several cases have challenged Chinese policies. China is challenging them right back, arguing that those countries do the same thing, and that people who live in protectionist glass houses shouldn’t throw stones. If they do, China can match them “tit for tat.” (A similar battle involving cross-accusations and threats between the EU and China began unfolding this week — you can read about it here).

There’s a critical difference, though, between China and its trade partners. They all may both have policies that can be called protectionist, but they come from different starting points. In the U.S., trade restrictions and subsidies tend to be the exception to the rule, and when they do occur, are usually transparent. There’s a public approval process and an overt policy that can be challenged at WTO. In China, restrictions and subsidies are pervasive, due to the large state role in the economy, and often hard to pin down.

via EconoMonitor : EconoMonitor » U.S.-China Trade War in the Offing?.

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 31, 2012

Bair: Regulators Should Tighten Volcker Rule – WSJ.com

Jamila Trindle: Regulators should push derivatives out of federally backed banks and tighten the Volcker rule, former Federal Deposit Insurance Corp. Chairman Sheila Bair said Thursday.

“Don’t let insured deposits fund that activity,” Ms. Bair said at a roundtable on the Volcker rule held by staff of the Commodity Futures Trading Commission.

via Bair: Regulators Should Tighten Volcker Rule – 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.