Analysis of major stock markets around the world.
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*.
* Target calculation: 640 – ( 720 – 640 ) = 560; 640 – ( 820 – 640 ) = 460
“HFTs appear to assist in decreasing excessive price volatility,” [Professor Alex Frino, CEO of Capital Markets Co-operative Research Centre (CMCRC) and Professor of Finance at the University of Sydney Business School] said. “This is partly due to the way HFT algorithms identify trading opportunities – they’re built to recognise when prices are abnormally high or low, and respond in a way that naturally pushes prices back towards the middle.”
via Securities Technology Monitor: Dark Trading Bad, HFT Good.
Mao Ye, Chen Yao and Jiading Gai of the University of Illinois at Urbana-Champaign found that “exogeneous technology shocks that increase the speed of trading from microseconds to nanoseconds dramatically increase” order cancellation rates and found “evidence consistent with quote stuffing.”
“As speed is of value to a trader, it is almost equally valuable to slow his competitors down,” the researchers said in their paper The Externality of High Frequency Trading.
via Securities Technology Monitor – Quote Stuffing Aims to Slow Rivals.
The ASX 200 is testing primary support at 3980/4000. Failure would confirm the primary down-trend signaled by downward breakout from the large ascending triangle (August to May) and reversal of 63-Day Twiggs Momentum below zero. Declining 13-week Twiggs Money Flow (below zero) indicates strong selling pressure.
Dow Jones Hong Kong Index is headed for primary support at 360. Failure would confirm the primary down-trend signaled by 63-day Twiggs Momentum below zero.
India’s Sensex is testing support at 16000/15800. Failure would mean another test of primary support at 15000/15200. Reversal of 13-week Twiggs Money Flow below zero indicates selling pressure. Failure of primary support would offer a target of 12000*.
* Target calculation: 15 – ( 18 − 15 ) = 12
Dow Jones Singapore Index broke medium-term support at 222, indicating a test of primary support at 208/210. Reversal of 13-week Twiggs Money Flow below zero indicates selling pressure. Failure of primary support would offer a target of 190*.
* Target calculation: 210 – ( 230 − 210 ) = 190
The FTSE 100 is testing medium-term support at 5250. Failure would mean another test of primary support at 5000/5050. Declining 63-Day Twiggs Momentum (below zero) indicates a primary down-trend. Failure of primary support would confirm.
Germany’s DAX broke medium-term support at 6200, penetration of the rising trendline warning that the up-trend is weakening. Expect a test of primary support at 5400. Reversal of 63-day Twiggs Momentum below zero suggests a primary down-trend. Failure of primary support would confirm.
The broader Dow Jones Europe Index is already testing primary support at 210. Declining 13-week Twiggs Money Flow (below zero) indicates strong selling pressure. Expect failure of support to signal a primary down-trend.
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.
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.
The CRB Commodities index is headed for a test of the 2010 low of 250. A 63-day Twiggs Momentum peak below zero warns of a strong primary down-trend. Divergence from the S&P 500 index warns that stocks are likely to fall, following commodities down — at least to their 2011 lows.
* Target calculation: 290 – ( 330 – 290 ) = 250
Treasury yields fell through the key support level of 1.70 percent as investors, seeking a safe haven, flowed into bonds. Declining 63-day Twiggs Momentum warns of further easing.
* Target calculation: 1.70 – ( 2.40 – 1.70 ) = 1.0
The monthly chart of the ASX 200 displays a downward breakout from the ascending triangle, forming since September 2011, offering a target of the 2008 low at 3200*. Reversal of 63-Day Twiggs Momentum below zero also suggests continuation of the primary down-trend.
* Target calculation: 3800 – ( 4400 – 3800 ) = 3200
