Stock Markets Archives - Page 89 of 170

June 16, 2014April 18, 2024

S&P 500: Strong Ichimoku trend

Today we take a look at long-term trend strength in North American markets using a great trend tool, Ichimoku Cloud, with weekly charts. Ichimoku is only available on the latest beta version of Incredible Charts (Help >> Upgrade To Latest Beta Version), but will soon be released with Incredible Charts 7.0.

Ichimoku offers a number of trend signals:

The trend is upward when price is above the Cloud (and downward when price is below).
A green cloud indicates an up-trend, while a red cloud indicates a down-trend.
Long trades are taken when the blue line crosses above the red. In strong trends, blue may hold above red for extended periods.

The S&P 500 encountered resistance and is consolidating below its target of 1950*. The trend above a green cloud is further strengthened by the blue (Tenkan) holding above the red (Kijun) for an extended period. Continuation of the up-trend is likely and breakout above 1950 would signal an advance to 2000.

S&P 500

* Target calculation: 1850 + ( 1850 – 1750 ) = 1950

Dow Jones Industrial Average displays a similar strong trend with few blue (Tenkan) dips below the red (Kijun) line. Breakout above resistance at 17000 would signal an advance to 17500*. Reversal below 16500 is unlikely, but would warn of another correction.

Dow Jones Industrial Average

* Target calculation: 16500 + ( 16500 – 15500 ) = 17500

The Nasdaq 100 recovery of blue (Tenkan) above the red (Kijun) line offers a fresh entry signal. Resistance at 3800 is unlikely to hold and follow-through would confirm the target of 4000* for the advance. Reversal below 3700 is unlikely, but would warn of another correction.

Nasdaq 100

* Target calculation: 3700 + ( 3700 – 3400 ) = 4000

Another indication of trend strength is the CBOE Volatility Index (VIX), currently trading at levels last seen in 2005/2006, which indicates low risk typical of a bull market.

VIX Index

June 12, 2014

ASX 200 weakens but Aussie dollar strengthens

Aussie dollar strengthens.
Stocks weaken.
But ASX 200 VIX continues to indicate a bull market.

The Aussie Dollar is testing resistance at $0.94. Consolidation in a narrow band suggests continuation of the rally towards $0.97/$0.98. Recovery of 13-week Twiggs Momentum above zero suggests a primary up-trend, but we may see the RBA intervene to prevent this. They may need to follow the RBNZ, introducing macro-prudential controls (e.g. setting a maximum 80% LVR percentage), to take the steam out of the housing market while lowering interest rates to weaken the currency.

Aussie Dollar

The ASX 200 respected resistance at 5500 and is headed for a test of medium-term support at 5400. Reversal of 21-day Twiggs Money Flow below zero warns of medium-term selling pressure and a correction. Breach of 5400 is likely and would test support at 5300 and the rising trendline. Respect of 5400 is unlikely, but would suggest another rally to 5550.

ASX 200

* Target calculation: 5550 + ( 5550 – 5400 ) = 5700

ASX 200 VIX below 12, however, continues to indicate low risk typical of a bull market.

ASX 200

June 12, 2014

Europe: DAX and Footsie test resistance

Euro weakens.
Stocks in a strong up-trend.

The Euro is testing primary support and the rising trendline at $1.35 on the weekly chart. Bearish divergence on 13-week Twiggs Momentum, followed by a cross below zero, warns of a trend reversal. Breach of support would strengthen the signal. Recovery above $1.37, however, would suggest another test of $1.40.

Euro

Dow Jones Euro Stoxx 50 is trending strongly on the monthly chart. Recovery of 13-week Twiggs Momentum above 10% would complete another trough above zero, further strengthening the trend. Reversal below 3000 and the primary trendline is most unlikely, but would warn of a reversal.

Dow Jones Euro Stoxx 50

* Target calculation: 3200 + ( 3200 – 3000 ) = 3400

The Footsie is again testing resistance at 6850. Follow-through above 6900 would signal an advance to 7200*. Falling 13-week Twiggs Money Flow indicates short-term selling pressure, but long-term oscillations above zero reflect strong buying pressure. Reversal below 6800 is less likely, but would warn of another correction.

FTSE 100

* Target calculation: 6800 + ( 6800 – 6400 ) = 7200

The DAX is sitting at the psychological barrier of 10000. Expect retracement to test support at 9800. Respect is likely and follow-through above 10000 would signal an advance to 10500* Recovery of 13-week Twiggs Money Flow above the declining trendline suggests that selling pressure is easing. Reversal below 9750/9800 is unlikely, but would warn of a correction to the rising trendline.

DAX

* Target calculation: 9750 + ( 9750 – 9000 ) = 10500

June 10, 2014

India leads the bulls

India’s Sensex broke through 25000, signaling an advance to 26000*. The primary trend is up and bearish divergence on 13-week Twiggs Money Flow insignificant. Reversal below 24000 is most unlikely. The trend is accelerating, with no end in sight, but investors should bear in mind that blow-offs are often followed by sharp falls.

Sensex

* Target calculation: 21000 + ( 21000 – 16000 ) = 26000

June 10, 2014

Canada: TSX 60 targets 900

A monthly chart shows Canada’s TSX 60 headed for its 2008 high of 900 after breaking resistance at 820. Bearish divergence on 13-week Twiggs Money Flow appears secondary, in line with the medium-term consolidation, but a further decline would warn of a correction. Reversal below support at 830 and the rising trendline is unlikely, but would indicate that the primary trend is slowing.

TSX 60

June 10, 2014

S&P 500 advancing towards 2000

The S&P 500 has reached its initial target of 1950*. Steeply rising 21-day Twiggs Money Flow indicates strong medium-term buying pressure. Retracement to test support at 1925 is expected. Respect of 1920 would suggest a strong up-trend and an advance to 2000.

S&P 500

* Target calculation: 1850 + ( 1850 – 1750 ) = 1950

CBOE Volatility Index (VIX) below 12 indicates low risk typical of a bull market.

VIX Index

The Nasdaq 100 broke resistance at 3700/3750, signaling an advance to 4000*. Rising 21-day Twiggs Money Flow again indicates strong medium-term buying pressure. Reversal below 3700 is unlikely, but would warn of another correction.

Nasdaq 100

* Target calculation: 3700 + ( 3700 – 3400 ) = 4000

June 3, 2014

ASX 200 retreats

The ASX 200 closed below short-term support at 5500, warning of another test of support at 5400. Declining 21-day Twiggs Money Flow indicates short-term selling pressure. Breakout above 5550 is unlikely in the short-term, but would signal an advance to 5700*.

ASX 200

* Target calculation: 5550 + ( 5550 – 5400 ) = 5700

ASX 200 VIX below 12 indicates low risk typical of a bull market.

ASX 200

June 3, 2014

Asia: India bullish but China weak

India’s Sensex found support at 24000. Recovery above 25000 would signal a fresh advance to 26000*. Breach of support is unlikely, but would warn of further correction. The primary trend is up and bearish divergence on 13-week Twiggs Money Flow indicates nothing more than medium-term selling pressure from the present correction.

Sensex

* Target calculation: 21000 + ( 21000 – 16000 ) = 26000

China’s Shanghai Composite Index continues to test primary support at 2000. Follow-through below 1990 would signal a decline to 1850*. Reversal of 13-week Twiggs Money Flow below zero signals medium-term selling pressure. Recovery above 2150 is unlikely, but would complete a triple-bottom reversal.

Shanghai Composite Index

* Target calculation: 2000 – ( 2150 – 2000 ) = 1850

Japan’s Nikkei 225 rebounded off primary support and is testing resistance at 15000. Follow-through above 15200 would signal another test of 16000. Recovery of 13-week Twiggs Money Flow above 20% would confirm long-term buying pressure. Reversal below 14000 is unlikely, but would signal a primary down-trend.

Nikkei 225

June 3, 2014

Footsie and DAX tentative breakout

The Footsie is again testing resistance at 6850. Follow-through above 6900 would signal an advance to 7200*. Rising 13-week Twiggs Money Flow troughs above zero indicate long-term buying pressure. Reversal below 6800 is unlikely, but would warn of another correction.

FTSE 100

* Target calculation: 6800 + ( 6800 – 6400 ) = 7200

The DAX broke resistance at 9800. Expect retracement to test the new support level. Respect is likely and follow-through above 10000 would signal an advance to 10500*. Recovery of 13-week Twiggs Money Flow above the declining trendline suggests that selling pressure is easing. Reversal below 9750/9800 is unlikely, but would warn of another correction.

DAX

* Target calculation: 9750 + ( 9750 – 9000 ) = 10500

June 3, 2014

TSX bullish consolidation

Canada’s TSX 60 is consolidating in a narrow range on the weekly chart. Upward breakout is likely and would signal contuation of the advance to the 2008 high of 900. Bearish divergence on 13-week Twiggs Money Flow appears secondary, in line with the medium-term consolidation, but a further decline would warn of a correction. Reversal below support at 830 and the rising trendline is unlikely, but would indicate that the primary trend is slowing.

TSX 60