Analysis of major stock markets around the world.
Canada’s TSX 60 index found strong support at 700. Rising 13-week Twiggs Money Flow signals buying pressure. Recovery above 720 would indicate a primary advance to 820*; follow-through above 730 would confirm.
* Target calculation: 720 + ( 720 – 620 ) = 820
The weekly S&P 500 chart suggests retracement to the new support level at 1370. No major deviation on 13-week Twiggs Money Flow indicates this is merely a secondary correction. Respect of 1350 would signal a primary advance. Long-term target for the breakout is 1600*.
* Target calculation: 1350 + ( 1350 – 1100 ) = 1600
Nasdaq 100 Index similarly displays a bearish divergence on 21-day Twiggs Money Flow but no major deviation on the 13-week indicator, suggesting a secondary correction to the long-term rising trendline.
* Target calculation: 2400 + ( 2400 – 2050 ) = 2750
Bellwether transport stock Fedex, however, displays a stronger bearish divergence, on 13-week Twiggs Money Flow. Failure of support at 88.00 would indicate reversal to a primary down-trend; follow-through below 86.00 would confirm. A Fedex down-trend would warn that economic activity is slowing.
STEPHEN BELL: China’s demand for iron ore is ‘flattening out’, a senior executive at BHP Billiton Ltd. said Tuesday.
Demand growth for the commodity used to make steel will drop “to single digits if it is not already there,” Ian Ashby told a press conference in Perth.
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.
* 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.
Medium-term selling pressure, signaled by bearish divergence on 21-day Twiggs Money Flow, continues to warn of a correction in US and Asia-Pacific markets. The Dow Jones TSM (formerly “Wilshire”) Asia-Pacific Index displays a bearish divergence since mid-February. Reversal below 1280 would confirm a correction.
Dow Jones Industrial Average shows a similar bearish divergence, though the latest down-turn was exaggerated by triple-witching hour [TW] on Friday. Reversal below 12750 would confirm a correction.
The ASX 200 continues in a narrow consolidation between 4300 and 4150, indicating uncertainty. Rising 13-week Twiggs Money Flow is a positive sign and recovery above 10% would suggest a primary up-trend. Breakout above 4300 would likewise suggest an up-trend, while follow-through above 4400 would confirm.
* Target calculation: 4400 + ( 4400 – 3800 ) = 5000
Hong Kong’s Hang Seng Index is in a primary up-trend. Having retraced briefly, it appears to have found support at 21000. Recovery above 21500 would signal an advance to 22500*.
* Target calculation: 20000 + ( 20000 – 17500 ) = 22500
The Shanghai Composite Index, however, remains in a primary down-trend. Breakout above 2500 would, however, suggest that the trend is weakening. Respect of support at 2300 would suggest reversal to a primary up-trend, while failure of support would warn of another decline.
* Target calculation: 2100 – ( 2500 – 2100 ) = 1700
Japan’s Nikkei 225 Index broke through resistance at 10000. Follow-through above 10200 would indicate a further advance as signaled by sharply rising 13-week Twiggs Money Flow. The rally is becoming dangerously extended and a correction to test support would add stability.
* Target calculation: 10000 + ( 10000 – 9000 ) = 11000
South Korea’s Seoul Composite Index is already in a primary up-trend. Respect of the zero line by 13-week Twiggs Money Flow again signals strong buying pressure. Follow-through above 2050 would signal an advance to 2200*.
* Target calculation: 1950 + ( 1950 – 1700 ) = 2200
The Sensex respected support at 17000. Recovery above 18000 would indicate a primary up-trend and follow-through above 18500 would confirm. Respect of zero by the latest trough on 13-week Twiggs Money Flow would further strengthen the signal. Target for the advance is 21000*.
* Target calculation: 18 + ( 18 – 15 ) = 21
The NSE Nifty shows a similar pattern. Follow-through above 5600 would offer a target of 6200*.
* Target calculation: 5400 + ( 5400 – 4600 ) = 6200
Singapore Straits Times Index is already in a primary up-trend, as signaled by 63-day Twiggs Momentum holding above zero. Recovery above 3000 confirms an advance to 3300*.
* Target calculation: 2900 + ( 2900 – 2500 ) = 3300
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*.
* Target calculation: 260 + ( 260 – 210 ) = 310
Italy’s MIB Index reflects a similar pattern, signaling an advance to 21000*.
* 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.
* Target calculation: 5700 + ( 5700 – 5000 ) = 6400
The DAX shows similar strong buying pressure and breakout above the 2011 high of 7500 is likely.
* Target calculation: 6400 + ( 6400 – 5400 ) = 7400
