Tag: ASX 200

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ASX 200: The scramble for yield

The ASX 200 broke short-term resistance at 5050 on the hourly chart before retreating to test its new support level. The index is advancing in layers of 25 points (5000 >> 5025 >> 5050 >> 5075) and shows no signs of abating. But retracement to test the new support level of 5000 remains likely in the larger time frames. Respect of support on the weekly chart would confirm a primary advance, with a long-term target of 6000*.

ASX 200 Index

* Target calculation: 5000 + ( 5000 – 4000 ) = 6000

One area of concern: the advance is being driven by a scramble for yield, with blue chip stocks in the ASX 50 [$XFL] out-performing mid-caps [$XMD] by a wide margin — the exact opposite of what one would expect in a bull market.

ASX 200 Index

The situation is even worse when comparing to small-caps [$XSO].

ASX 200 Index

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ASX 200 passes first test

The ASX 200 passed its first test after breaking long-term resistance at 5000. The index retraced to test the new support level [test #1] in the first hour of trading today but rallied strongly thereafter. Respect of support strengthens the breakout signal but expect further tests in the weeks ahead. Respect in the Daily and Weekly time frames would confirm the primary advance, with a long-term target of 6000*.

ASX 200 Index

* Target calculation: 5000 + ( 5000 – 4000 ) = 6000

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ASX 200 tests 5000

The ASX 200 continues to test resistance at 5000. Rising troughs on 13-week Twiggs Money Flow indicate strong buying pressure. Breakout is likely and would offer a long-term target of 6000*. Respect of resistance, while unlikely, would suggest a correction to 4500.

ASX 200 Index

* Target calculation: 5000 + ( 5000 – 4000 ) = 6000

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ASX 200 approaches key resistance level

The ASX 200 is retracing today to test short-term support at 4900 but medium-term buying pressure — as indicated by 21-day Twiggs Money Flow troughs above zero — suggests a test of 5000.

ASX 200 Index

Rising 63-day Twiggs Momentum suggests continuation of the primary up-trend. Breakout above 5000 would offer a long-term target of 6000*.

ASX 200 Index

* Target calculation: 5000 + ( 5000 – 4000 ) = 6000

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ASX 200 approaches key resistance level

The ASX 200 is headed for a test of resistance at 5000, supported by rising 63-day Twiggs Momentum and 13-week Twiggs Money Flow (shown below) signaling buying pressure. Breakout would signal an advance to 6000. S&P 500 breakout above its 2007 high would enhance buying pressure, while failure would suggest a re-test of medium-term ASX 200 support at 4500.

ASX 200 Index

* Target calculation: 5000 + ( 5000 – 4000 ) = 6000

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Stocks: The year ahead

A quick recap of the quarterly chart overview from December 2012:

The S&P 500 is headed for a test of its 2000/2007 high at 1550. Declining 63-day Twiggs Momentum and a lackluster economy suggest that resistance is unlikely to be broken. Breach of the rising trendline would indicate a test of support at 1100.

S&P 500 Index

Canada’s TSX Composite Index is gaining momentum. Follow-through above 13000 would indicate another test of 15000.

Apple

Germany’s DAX threatens a breakout above 8000. Follow-through above 8200 would confirm a strong primary advance.

DAX Index

The FTSE 100 broke resistance at 6000, suggesting an advance to 7000.

FTSE 100 Index

India’s Sensex is testing resistance at 21000. Rising momentum indicates breakout is likely, heralding a fresh primary advance.

BSE Sensex Index

Singapore’s Straits Times Index lags behind, but breakout above 3300 is likely and would indicate an advance to 3900.

Apple

The Shanghai Composite is headed for a re-test of long-term support at 1800/1750. Rising momentum suggests that a bottom will form at this level. Recovery above 2500 and/or the declining trendline would strengthen the signal.

Shanghai Composite Index

The ASX 200 is headed for a test of resistance at 5000, supported by rising 63-day Twiggs Momentum. Breakout would signal an advance to 6000, but weakness in China or the US may delay this for some time.

ASX 200 Index

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Stocks: Outlook for 2013

Quarterly charts for the last two decades give a good idea of where stocks will be headed in 2013.

The S&P 500 is headed for a test of its 2000/2007 high at 1550. Declining 63-day Twiggs Momentum indicates that resistance is unlikely to be broken. While this does not mean another fall to 750, it does suggest a strong correction.

S&P 500 Index

Apple Inc. [AAPL] is no longer leading the advance but testing primary support at 500. Failure of support would confirm the primary down-trend indicated by a 63-day Twiggs Momentum peak below zero.

Apple

Germany’s DAX is also headed for a test of its 2000/2007 high, at 8200, but rising momentum indicates that breakout above resistance is likely.

DAX Index

The FTSE 100 is also advancing but is some way off its earlier high of 7000 and breakout appears unlikely.

FTSE 100 Index

India’s Sensex is more bullish and likely to break resistance at 21000.

BSE Sensex Index

The Shanghai Composite is headed in the opposite direction and likely to re-test long-term support at 1800/1750. Rising 63-day Twiggs Momentum (below zero) suggests that a bottom will form at this level.

Shanghai Composite Index

The ASX 200 is headed for a test of resistance at 5000, supported by rising 63-day Twiggs Momentum. Breakout would signal an advance to 6000, but weakness in China and the US may delay this for some time.

ASX 200 Index

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Australia: ASX 200 in retreat

The ASX 200 index retreated sharply Monday, following bearish performance in the US on Friday. Downward breakout from the rising channel would indicate another primary down-swing, with a target of 3800*. Reversal below 3990 would confirm.

ASX 200 Index

* Target calculation: 4000 – ( 4200 – 4000 ) = 3800

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ASX 200 tests ceiling

The ASX 200 index is headed for a test of resistance at 4170 after forming a higher trough. Breakout would indicate a rally to test 4450. Recovery of 63-day Twiggs Momentum above zero would strengthen the signal. In the long term, breakout above 4450 would signal a primary up-trend, but that may be some way off. Reversal below 3990 seems just as remote but would signal another primary decline.

ASX 200 Index

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Australia: ASX 200

A monthly chart of the ASX 200 shows how the index tends to peak ahead of the CRB Commodities Index and Australian Dollar but then fall in step with them from there on. The ASX 200 was first to reverse direction in 2011 but commodities now lead the way. Expect Australian stocks — and the Aussie Dollar — to follow commodities lower. Breach of primary support at 3850 would offer a target of 3200*.

ASX 200, CRB Commodities Index, AUDUSD - Monthly Chart

* Target calculation: 3800 – ( 4400 – 3800 ) = 3200

On the daily chart, breach of support at 3980/4000 would signal a test of primary support at 3850. Reversal of 21-day Twiggs Money Flow below zero, warning of medium-term selling pressure, increases the likelihood of a downward breakout.

ASX 200 Index

* Target calculation: 4000 – ( 4150 – 4000 ) = 3850

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