Tag: BSE Sensex

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Long-tailed candles

Stocks are recovering from their recent soft patch and breakout above resistance is likely, signaling further gains.

North American Stocks

The S&P 500 is testing medium-term resistance at 2120. Breakout would signal an advance to 2200*. Three weekly candles with long tails reflect medium-term buying pressure, while a 13-week Twiggs Money Flow trough high above zero indicates long-term pressure. Retracement that respects the new support level at 2100 would further strengthen the bull signal.

S&P 500 Index

* Target calculation: 2120 + ( 2120 – 2040 ) = 2200

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

S&P 500 VIX

Dow Jones Industrial Average is testing resistance at 18300. Buying pressure appears similar to the S&P 500 and breakout would offer a target of 19000*.

Dow Jones Industrial Average

* Target calculation: 18300 + ( 18300 – 17600 ) = 19000

Canada’s TSX 60 found support at 870. 13-Week Twiggs Momentum holding above zero continues to indicate a primary up-trend. Breakout above 900 would offer a long-term target of 1000*.

TSX 60 Index

* Target calculation: 900 + ( 900 – 800 ) = 1000

Europe

Germany’s DAX encountered support above 11000. Penetration of the descending trendline would indicate the correction is over and follow-through above 12000 would suggest a primary advance. Declining 13-week Twiggs Money Flow warns of continued selling pressure and a further test of 11000, but respect of support remains likely and would provide a solid base for further advances.

DAX

The Footsie also displays long tails, suggesting medium-term buying support, but declining 13-week Twiggs Money Flow indicates continued selling pressure. Breach of 6900 would warn of a correction to 6700, but further losses are unlikely at present. Recovery above 7100 would confirm the long-term breakout, offering a target of 8000*.

FTSE 100

* Target calculation: 7000 + ( 7000 – 6000 ) = 8000

Asia

The Shanghai Composite is consolidating between 4000 and 4500. Breach of either of these levels would signal future direction. Declining 13-week Twiggs Money Flow warns of medium-term selling pressure, favoring the downside.

Shanghai Composite Index

* Target calculation: 3500 + ( 3500 – 2500 ) = 4500

Short retracement on Japan’s Nikkei 225 Index is a bullish sign. Breakout above 20000 would offer a target of 22000*. Declining 13-week Twiggs Money Flow reflects medium-term selling pressure; recovery above the descending trendline would be a bullish sign.

Nikkei 225 Index

* Target calculation: 20000 + ( 20000 – 18000 ) = 22000

India’s Sensex found support between 26500 and 27000. Long tails suggest medium-term buying pressure. Recovery above 28000 and the descending trendline would suggest another attempt at 30000. But 13-week Twiggs Money Flow remains below zero, warning of (long-term) selling pressure. Another peak below zero would warn of breach of primary support and a reversal.

SENSEX

Australia

ASX 200 support at 5750, 5650 or 5550: which is most relevant? Judging by some of the questions received, I succeeded in confusing a number of readers. Here is a brief summary:

  • 5750 acted as medium-term support until the beginning of May, when breach of 5750 and the rising trendline warned of a correction.
  • 5750 transformed into medium-term resistance and penetration would suggest the correction is over.
  • There is a strong band of support between the two recent (2014) highs of 5650 and 5550.
  • Breach of this band (i.e. below 5550) would indicate a test of primary support at 5120.
  • Respect (i.e. 5550 intact) would provide a solid base for a rally and a further (primary) advance if resistance at 6000 is broken.

Mild decline of 13-week Twiggs Money Flow suggests medium-term selling pressure — not a reversal. Recovery above 5750 remains more likely than breach of 5550.

ASX 200

* Target calculation: 6000 + ( 6000 – 5750 ) = 6250


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I think I’ve done the best I could have done. But I keep wanting to play better, go further. There are so many sounds I still want to make, so many things I haven’t yet done. When I was younger I thought maybe I’d reached that peak. But I’m 86 now, and if I make it through to next month, I’ll be 87. And now I know it can never be perfect, it can never be exactly what it should be, so you got to keep going further, getting better.

~ Riley (B.B.) King

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Asian stocks

The Shanghai Composite is consolidating between 4000 and 4500. Breach of either of these levels would signal future direction. Declining 13-week Twiggs Money Flow warns of medium-term selling pressure, favoring the downside.

Shanghai Composite Index

* Target calculation: 3500 + ( 3500 – 2500 ) = 4500

Short retracement on Japan’s Nikkei 225 Index is a bullish sign. Breakout above 20000 would offer a target of 22000*. Declining 13-week Twiggs Money Flow reflects medium-term selling pressure; recovery above the descending trendline would be a bullish sign.

Nikkei 225 Index

* Target calculation: 20000 + ( 20000 – 18000 ) = 22000

India’s Sensex found support between 26500 and 27000. Long tails suggest medium-term buying pressure. Recovery above 28000 and the descending trendline would suggest another attempt at 30000. But 13-week Twiggs Money Flow remains below zero, warning of (long-term) selling pressure. Another peak below zero would warn of breach of primary support and a reversal.

SENSEX

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TSX bull signal

Canada’s TSX 60 index has followed the Footsie bull signal of last week, breaking long-term resistance at 900 to signal a fresh advance and long-term target of 1000*. A 13-week Twiggs Momentum trough above zero strengthens the signal. Expect retracement to test the new support level, but respect is likely.

TSX 60 Index

* Target calculation: 900 + ( 900 – 800 ) = 1000

Global stocks are generally recovering and appear set for another advance.

The S&P 500 recovered above 2100; follow-through above 2120 would confirm an advance to 2200*. 13-Week Twiggs Money Flow oscillating above zero reflects long-term buying pressure. Breach of support at 2040/2050 remains unlikely, but would test primary support at 1980/2000.

S&P 500 Index

* Target calculation: 2120 + ( 2120 – 2040 ) = 2200

Declining CBOE Volatility Index (VIX) is close to its lows of 2013, indicating low risk typical of a bull market.

S&P 500 VIX

Europe

Germany’s DAX encountered resistance at Deutsche Bank’s long-term target of 12500. Expect retracement to test support at 12000. Respect of support, and a short retracement, would be a bullish sign, suggesting an advance to 13000. Reversal below 12000 is unlikely, but would warn of a correction to the primary trendline at 11000.

DAX

* Target calculation: 12500 + ( 12500 – 12000 ) = 13000

Initial retracement of the Footsie respected new support at 7000. Declining 13-week Twiggs Money Flow indicates medium-term selling pressure. Expect further retracement, but reversal below 6950/7000 is unlikely.

FTSE 100

* Target calculation: 7000 + ( 7000 – 6000 ) = 8000

Asia

Patrick Chovanec’s tweet on China sums up my ambivalent attitude towards Chinese stocks:

The Shanghai Composite Index broke resistance at 4000 and is now retracing to test the new support level. Rising 13-week Twiggs Money Flow continues to indicate long-term buying pressure.

Shanghai Composite Index

* Target calculation: 3400 + ( 3400 – 2400 ) = 4400

Japan’s Nikkei 225 Index continues to test resistance at 20000. Rising 13-week Twiggs Momentum indicates long-term buying pressure. Breach of support at 19000 is unlikely. Breakout above 20000 would offer a long-term target of 22000*.

Nikkei 225 Index

* Target calculation: 20000 + ( 20000 – 18000 ) = 22000

India’s Sensex is approaching a watershed moment, having encountered resistance at 29000. Breakout would test 30000 and suggest an advance to 33000. Respect of resistance, however, would be a strong bear signal: reversal below 27000 would warn of a primary down-trend. 13-Week Twiggs Momentum has been slowing for the past 9 months and decline of 13-week Twiggs Money Flow to zero reinforces this. Recovery would indicate a false alarm while reversal below zero would reflect further selling.

SENSEX

Australia

The ASX 200 appears set for another test of resistance at 6000, the upper border of a bullish ascending triangle. Breakout above 6000 would signal an advance to 6250*. Declining 21-day Twiggs Money Flow, however, warns of medium-term selling pressure. Reversal below 5900 and the lower border of the triangle would warn of another correction.

ASX 200

* Target calculation: 6000 + ( 6000 – 5750 ) = 6250


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Don’t be afraid of missing opportunities. Behind every failure is an opportunity somebody wishes they had missed.

~ Lily Tomlin

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Footsie breaks 7000

London’s FTSE 100 broke long-term resistance at its 1999 high, closing the week above 7000 and signaling a primary advance. Expect retracement to test the new support level, but the long-term target is 8000*.

FTSE 100

* Target calculation: 7000 + ( 7000 – 6000 ) = 8000

Global stocks, generally, recovered from recent weakness and appear set for another advance.

The S&P 500 recovered above 2100, suggesting a fresh advance. Foolow-through above 2120 would confirm, offering a target of 2200*. A 21-day Twiggs Money Flow trough above zero would reflect long-term buying pressure. Breach of support at 2040/2050 is unlikely, but would test primary support at 1980/2000.

S&P 500 Index

* Target calculation: 2120 + ( 2120 – 2040 ) = 2200

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

S&P 500 VIX

Bellwether transport stock Fedex rallied off primary support at 164. A 13-week Twiggs Money Flow trough at zero suggests continuation of the primary up-trend; a good sign for the economy.

Fedex

Europe

Germany’s DAX followed through above 12200, offering a medium-term target of 12800*. Rising 13-week Twiggs Money Flow indicates long-term buying pressure. Reversal below 12000 is unlikely.

DAX

* Target calculation: 12200 + ( 12200 – 11600 ) = 12800

The Footsie built a solid base of support, with two short corrections, for its breakout above 7000. 13-Week Twiggs Money Flow high above zero indicates long-term buying pressure. Expect retracement to test the new support level, but reversal below 6950/7000 is unlikely.

FTSE 100

* Target calculation: 7000 + ( 7000 – 6000 ) = 8000

Asia

China’s Shanghai Composite Index continues its primary advance, breaking resistance at 4000. An up-turn in the Harpex container shipping index suggests an increase in international trade. Rising 13-week Twiggs Money Flow indicates long-term buying pressure.

Shanghai Composite Index

* Target calculation: 3400 + ( 3400 – 2400 ) = 4400

Japan’s Nikkei 225 Index is testing resistance at 20000. Rising 13-week Twiggs Momentum indicates long-term buying pressure. Breach of support at 19000 is unlikely. Breakout above 20000 would offer a long-term target of 22000*.

Nikkei 225 Index

* Target calculation: 20000 + ( 20000 – 18000 ) = 22000

India’s Sensex recovery above 28500 indicates the correction is over. Expect another test of resistance at 30000. Recovery of 13-week Twiggs Money Flow above zero suggests continuation of the up-trend. Breakout above 30000 would offer a target of 33000. Breach of primary support at 26500/27000 is now unlikely.

SENSEX

Australia

The ASX 200 is testing resistance at 6000, the upper border of a bullish ascending triangle. Breakout above 6000 would signal an advance to 6250*. Rising 13-week Twiggs Money Flow indicates long-term buying pressure. Reversal below 5750 is unlikely, but would warn of a correction to 5500.

ASX 200

* Target calculation: 6000 + ( 6000 – 5750 ) = 6250


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The greatest deception men suffer is from their own opinions.

~ Leonardo da Vinci

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Stocks hesitant

The S&P 500 found short-term support at 2050, but declining 21-day Twiggs Money Flow indicates medium-term selling pressure. Breach of support would signal a correction to test the band of primary support between 1970 and 2000. Recovery above 2080 is less likely at present, but would indicate another test of 2120.

S&P 500 Index

* Target calculation: 2100 + ( 2100 – 2000 ) = 2200

Long-term, the S&P 500 remains bullish and CBOE Volatility Index (VIX) continues to indicate low risk typical of a bull market.

S&P 500 VIX

Dow Jones Industrial Average also retreated and is testing medium-term support at 17500/17600 on the weekly chart. Declining 13-week Twiggs Money Flow indicates moderate selling pressure. Breach of 17500 would test primary support at 17000, while recovery above 18000 would signal another primary advance — confirmed if there is follow-through above 18300.

Dow Jones Industrial Average

* Target calculation: 18000 + ( 18000 – 17000 ) = 19000

Europe

Germany’s DAX encountered resistance at 12000, but selling pressure looks weak. Rising 13-week Twiggs Money Flow indicates long-term buying pressure. Expect support at 11500. Recovery above 12000 would suggest an advance to 12500*.

DAX

* Target calculation: 10000 + ( 10000 – 7500 ) = 12500

The Footsie retreated from 7000. Declining 13-Week Twiggs Money Flow indicates medium-term selling pressure. Breach of support at 6700 would warn of a correction to test primary support at 6150/6200, while respect of support at 6700 would be a bullish sign. Breakout above 7000 would offer a long-term target of 8000*.

FTSE 100

* Target calculation: 7000 + ( 7000 – 6000 ) = 8000

Asia

China’s Shanghai Composite Index continues its primary advance. Recovery of 13-week Twiggs Money Flow above its descending trendline strengthens the signal. Retracement to test the new support level at 3400 remains likely, but expected to be weak.

Shanghai Composite Index

* Target calculation: 3400 + ( 3400 – 2400 ) = 4400

Japan’s Nikkei 225 Index is retracing. Breach of support at 19000 would signal a correction to test 18000, but respect is more likely and recovery above 19500 would indicate another attempt at the long-term target of 20000*. Rising 13-week Twiggs Momentum indicates long-term buying pressure.

Nikkei 225 Index

* Target calculation: 18000 + ( 18000 – 16000 ) = 20000

India’s Sensex is faltering at resistance at 30000. Reversal of 13-week Twiggs Money Flow below zero warns of strong selling pressure. Breach of primary support at 26500/27000 would signal a reversal. Respect of the primary trendline, however, would establish a sound base for further advances.

SENSEX

Australia

The ASX 200 continues to hesitate at 6000. Declining 13-week Twiggs Money Flow indicates moderate (medium-term) selling pressure. Reversal below 5750 is unlikely, but would warn of a correction to 5500. Breakout above 6000 would offer a (medium-term) target of 6250*.

ASX 200

* Target calculation: 6000 + ( 6000 – 5750 ) = 6250


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The measure of who we are is what we do with what we have.

~ Vince Lombardi

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Fed patience buoys stocks

The S&P 500 rallied to 2100 on the strength of the Fed’s latest FOMC statement, allaying fears of an imminent rate rise. Follow-through above 2120 would indicate a test of 2200*. Another 13-week Twiggs Money Flow trough above zero would signal continuation of the primary up-trend.

S&P 500 Index

* Target calculation: 2100 + ( 2100 – 2000 ) = 2200

CBOE Volatility Index at 14 indicates low risk typical of a bull market.

S&P 500 VIX

Europe

Germany’s DAX retreated below its long-term target at 12000*. Correction to 11000 would indicate a healthy up-trend, while narrow consolidation below 12000 would be a bullish sign. Rising 13-week Twiggs Money Flow indicates strong buying pressure.

DAX

* Target calculation: 11000 + ( 11000 – 10000 ) = 12000

The Footsie rallied to 6950. The short correction is a bullish sign, suggesting a fresh advance. 13-Week Twiggs Money Flow oscillating above zero indicates healthy buying pressure. Breakout above 7000 would signal a primary advance with a long-term target of 8000*.

FTSE 100

* Target calculation: 7000 + ( 7000 – 6000 ) = 8000

Asia

China’s Shanghai Composite Index broke resistance at 3400, signaling a fresh advance. Economic data is not strong, but expectation of further stimulus has buoyed the market. A 13-week Twiggs Money Flow rally indicates medium-term buying pressure. Reversal below 3050 is now unlikely.

Shanghai Composite Index

* Target calculation: 3400 + ( 3400 – 2400 ) = 4400

Japan’s Nikkei 225 Index is heading for a test of its long-term target at 20000*. Rising 13-week Twiggs Momentum indicates a strong (primary) up-trend.

Nikkei 225 Index

* Target calculation: 18000 + ( 18000 – 16000 ) = 20000

India’s Sensex faces stiff resistance at 30000. Declining 13-week Twiggs Momentum warns the primary-trend is weakening. Recovery above 29000 would indicate the correction is over, while breach of 28000 would test primary support at 26500/27000. Respect of the primary trendline would establish a solid base for further advances.

SENSEX

Australia

The ASX 200 rallied to 5950, the short correction suggesting another advance. Breakout above 6000 would confirm, offering a (medium-term) target of 6250*. Rising 13-week Twiggs Money Flow indicates buying pressure. Reversal below 5750 is unlikely, but would warn of a correction to 5500.

ASX 200

* Target calculation: 6000 + ( 6000 – 5750 ) = 6250


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Concessions to adversaries only end in self reproach, and the more strictly they are avoided the greater will be the chance of security.

~ Thucydides (c. 460 BC – c. 400 BC): History of the Peloponnesian War

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Markets back on track

Threat of a Russian collapse roiled markets in early December, but the immediate crisis now seems to have passed.

Recovery of the S&P 500 above resistance at 2080 would indicate another advance , with a target of 2150*. Rising 13-week Twiggs Money Flow troughs indicate long-term buying pressure. Reversal below 2000 is most unlikely.

S&P 500 Index

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

A 10-year view of CBOE Volatility Index (VIX) suggests low to moderate risk typical of a bull market.

S&P 500 VIX

My favorite bellwether, transport stock Fedex, also underwent a correction. The long tail suggests buying pressure and breakout above the recent high would confirm a strong bull trend, indicating rising economic activity.

Fedex

Dow Jones Euro Stoxx 50 found support at 3000 and is likely to test 3300. Rising 13-week Twiggs Money Flow indicates buying pressure, but the index is likely to continue ranging between these two levels until tensions between Russia and Eastern Europe are resolved.

DJ Euro Stoxx 50

China’s Shanghai Composite Index is in a strong bull trend, having broken resistance at 2500, and is likely to test the 2009 high at 3500. Rising 13-week Twiggs Money Flow indicates strong (medium-term) buying pressure.

Shanghai Composite Index

I continue to question China’s ability to sustain this performance, given their poor economic foundation.

Japan’s Nikkei 225 Index breakout above its 2007 high of 18000 would signal an advance to 19000*. Rising 13-Week Twiggs Money Flow indicates strong buying pressure. Index gains are largely attributable to rising inflation and a weaker yen.

Nikkei 225 Index

* Target calculation: 18000 + ( 18000 – 17000 ) = 19000

India’s Sensex found support at 27000. Recovery above 28000 would suggest another advance. Breakout above 29000 would confirm a target of 31000*.

Sensex

* Target calculation: 29000 + ( 29000 – 27000 ) = 31000

ASX 200 performance remains weak. Breach of the recent descending trendline suggests that the correction is over, but only breakout above 5550 would complete a double-bottom formation, suggesting a fresh advance. Rising troughs on 13-week Twiggs Money Flow indicate medium-term buying pressure. Reversal of TMF below zero, or breach of support at 5000/5150, is now less likely, but would warn of a down-trend.

ASX 200

* Target calculation: 5500 + ( 5500 – 5000 ) = 6000

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Sensex narrow consolidation

India’s Sensex displays narrow consolidation below resistance at 28000, suggesting continuation of the up-trend. Reversal below 27000 and the secondary trendline is less likely, but would warn of a correction. Troughs above zero on 13-week Twiggs Money Flow indicate buying pressure.

Sensex

* Target calculation: 28000 + ( 28000 – 27000 ) = 29000

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Asia: Governor Kuroda bets on QE

Aggressive asset purchases by the Bank of Japan shows Governor Kuroda’s willingness to back his QE policy to the hilt. The Yen has weakened significantly against the Dollar over the last two years and this trend is likely to continue.

USDJPY

The Nikkei 225 surged through 16300, signaling a fresh advance. The long-term target is 18000*. Reversal below 16000 is unlikely, but would warn of another correction. Recovery of 13-week Twiggs Money Flow above zero indicates medium-term buying pressure.

Nikkei 225

* Target calculation: 16000 + ( 16000 – 14000 ) = 18000

Hong Kong’s Hang Seng Index is testing resistance at 24000. Reversal below 23000 would warn of a primary down-trend. Breach of 21200 would confirm. Reversal of 13-week Twiggs Money Flow below zero would strengthen the bear signal. Follow-through above 25000 is unlikely, but would signal another primary advance.

Hang Seng Index

China’s Shanghai Composite Index respected support at 2250, strengthening the bull signal. Follow-through above 2450 would confirm a primary up-trend. 13-Week Twiggs Money Flow remains in an up-trend, signaling medium-term buying pressure. Reversal below 2250 is unlikely, but would warn of trend weakness.

Shanghai Composite Index

* Target calculation: 2250 + ( 2250 – 2000 ) = 2500

India’s Sensex continues in a primary up-trend, testing resistance at 28000. Troughs above zero on 13-week Twiggs Money Flow indicate buying pressure. Short retracements rather than stronger corrections also suggest buying pressure. Breakout above 28000 would indicate an advance to 29000. The index is becoming over-extended, but may remain so for some time. Reversal below 27000 and the secondary trendline is less likely, but would indicate a correction to the primary trendline around 25000.

Sensex

* Target calculation: 27000 + ( 27000 – 26000 ) = 28000

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Hong Kong weighs on China

Hong Kong’s Hang Seng Index is testing support at 23000. Narrow consolidation warns of continuation to test primary support at 21200. Reversal of 13-week Twiggs Money Flow below zero suggests a primary down-trend. Breach of support at 21200 would confirm.

Hang Seng Index

China’s Shanghai Composite Index is retracing after penetration of its secondary trendline, but at this stage it’s no more than a secondary correction. Hong Kong could weigh on the index, however. Reversal of 13-week Twiggs Money Flow below zero would warn of a primary down-trend.

Shanghai Composite Index

* Target calculation: 2250 + ( 2250 – 2000 ) = 2500

India’s Sensex broke clear of its recent flag formation and is again testing resistance at 27000. Bearish divergence on 13-week Twiggs Money Flow remains a concern, but breakout above 27000 would indicate an advance to 28000*. Reversal below 26000 would signal a correction to the primary trendline.

Sensex

* Target calculation: 27000 + ( 27000 – 26000 ) = 28000

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