Category: Stock Markets

Analysis of major stock markets around the world.

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Weakening yen boosts Japanese stocks

The US Dollar retreated to test new support at ¥102 to ¥103. Respect is likely and would signal an advance to ¥110*. A rising Dollar/Yen exchange rate will assist Japanese stocks.

Nikkei 225

* Target calculation: 106 + ( 106 – 102 ) = 110

The Nikkei 225 retreated below its new support level at 16000, but respect of the rising trendline would confirm a healthy up-trend. 13-week Twiggs Money Flow holding above zero suggests healthy buying pressure. Reversal below 15000 is unlikely but would indicate a strong correction.

Nikkei 225

* Target calculation: 16000 + ( 16000 – 15000 ) = 17000

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Footsie breaks out

The FTSE 100 broke resistance at 6800, indicating a test of long-term resistance at 6950/7000. Completion of another 13-week Twiggs Money Flow trough above zero would signal long-term buying pressure. Retracement to test the new support level at 6800 is likely. Respect would strengthen the bull signal. Reversal below 6700 is unlikely, but would warn of a correction.

FTSE 100

* Target calculation: 6700 + ( 6700 – 6400 ) = 7000

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DAX heading for 10000

Germany’s DAX broke resistance at 9600, heading for the psychological barrier of 10000. Reversal below the secondary trendline is unlikely, but would warn of a correction. Completion of another 13-week Twiggs Money Flow high above zero would signal strong long-term buying pressure.

DAX

* Target calculation: 9400 + ( 9400 – 9000 ) = 9800

Low DAX Volatility suggests a bull market.

DAX

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European markets bullish despite weak euro

The Euro penetrated its rising trendline, warning of a correction. Breach of primary support at $1.33 is unlikely, but would signal a reversal.

Euro

* Target calculation: 1.38 + ( 1.38 – 1.33 ) = 1.43

Dow Jones Euro Stoxx 50 appears undeterred, following through above resistance at 3100 to signal an advance to 3350*. 13-week Twiggs Momentum oscillating above zero suggests a healthy up-trend. Breach of the secondary trendline is unlikely, but would warn of a correction.

Dow Jones Euro Stoxx 50

* Target calculation: 3100 + ( 3100 – 2850 ) = 3350

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Canada: Bull market

Canada’s TSX 60 is heading for a test of resistance at the 2011 high of 820* after successfully testing its new support level at 780. Rising 13-week Twiggs Money Flow suggests strong buying pressure. Breach of the rising trendline is unlikely, but would warn of a correction.

TSX 60

* Target calculation: 780 + ( 780 – 740 ) = 820

Declining TSX 60 VIX, below 20, flags a bull market.

TSX 60 VIX

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Bull market but correction overdue

Both the S&P 500 and Nasdaq 100 have exceeded their targets. Absence of a significant correction for several months indicates extreme bullishness, but makes the advance more precarious as buyer/seller imbalances grow.

The S&P 500 is testing medium-term resistance at 1850. Breakout would confirm a target of 1900*. Respect is less likely, but would warn of a correction if followed by reversal below 1810. Rising 21-day Twiggs Money Flow suggests (short-term) buying pressure, but reversal below the rising trendline would warn of medium-term bearishness.

S&P 500

* Target calculation: 1850 + ( 1850 – 1800 ) = 1900

Declining CBOE Volatility Index (VIX) readings for the S&P 500 continue to indicate a bull market.

VIX Index

The Nasdaq 100 is similarly testing resistance at 3600. Twiggs Money Flow troughs high above the zero line indicate strong buying pressure. Absence of a significant correction makes the advance more precarious, but the imbalance can endure for several months.

Nasdaq 100

* Target calculation: 3600 + ( 3600 – 3500 ) = 3700

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ASX selling pressure

The ASX 200 found short-term support at 5200. Recovery above 5400 would signal another advance, but failure is more likely and would indicate another test of primary support at 5000. Declining 13-week Twiggs Money Flow warns of medium-term selling pressure.

ASX 200

* Target calculation: 5450 + ( 5450 – 5050 ) = 5850

The ASX 200 VIX below 20, however, continues to reflect low market risk.

ASX 200

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India ascending

India’s Sensex displays a bullish ascending triangle above long-term support at 20200. Breakout above resistance at 21200 would signal an advance to 22000*. Declining 13-week Twiggs Money Flow indicates medium-term selling pressure typical of a consolidation. Completion of a trough above zero would indicate long-term selling pressure.

Sensex

* Target calculation: 21000 + ( 21000 – 20000 ) = 22000

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China weakens

China’s Shanghai Composite is headed for 1950 after breaking support at 2080 to confirm a primary down-trend. Twiggs Money Flow below zero indicates selling pressure.

Shanghai Composite Index

* Target calculation: 2100 – ( 2250 – 2100 ) = 1950

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Nikkei 225 retreats as Yen falls

Japan’s Nikkei 225 retreated below support at 16000 and is testing the long-term trendline. Breach of support at 15000 would warn of a test of primary support at 13200, while recovery above 16000 would suggest a primary advance to 17500*. A rising Dollar/Yen exchange rate would strengthen the bull signal.

Nikkei 225

* Target calculation: 15000 + ( 15000 – 12500 ) = 17500

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