Bellwether transport stock Fedex displays a bear market rally with a target of 80. UPS is even stronger, having broken out from its trading range of the last 2 months to signal a re-test of its 2011 high. Not enough to indicate an up-turn but encouraging all the same.
Bullish divergence on India’s SENSEX 13-week Twiggs Money Flow suggests a double bottom reversal. Breakout above 17200 would confirm, signaling a bear market rally with a target of 18600*. Note that the primary down-trend would remain downward.
* Target calculation: 17200 + ( 17200 – 15800 ) = 18600
Singapore’s Straits Times Index recovered above short-term resistance at 2650 after a sharp fall over several weeks. We could see a bear market rally to 2900, but the primary trend, as signaled by declining 63-day Twiggs Momentum, remains in a strong down-trend.
* Target calculation: 2700 – ( 2900 – 2700 ) = 2500
Many investors are entering this week with fresh hopes the worst is over, after last week’s sudden stock-market rebound. But history suggests that in times of market turmoil, there is a risk that big, sudden gains like last week’s will prove temporary respites before stocks fall again. Head-snapping volatility, both steep drops and sharp gains, most often comes in times of market trouble. It suggests that, despite the bounce last week, the market isn’t healthy, says economic historian Richard Sylla of New York University’s Stern School of Business. “Financial markets become more volatile in periods of stress. People don’t know which way things are going to go, so you get these big up and down movements as people pile in and get out,” he says.
