Bellwether transport stock Fedex, in a primary down-trend, warns of slowing economic activity in the US. The 6-month Twiggs Momentum peak below zero flags a strong down-trend. Breach of support at 130.00 would warn of another decline — and worsening economic climate.
European equivalent Deutsche Post AG (DPW.DE), owner of DHL, also warns of declining economic activity. Breach of support at 23.00 would warn of another decline.
Deutsche Post AG (y_DPW.DE) serves as a bellwether for European markets, with subsidiary DHL couriers occupying a similar position to that of Fedex in US markets. DPW is testing resistance at €28.00 after a strong correction. 13-Week Twiggs Momentum recovered above zero and breakout above €28.00 would indicate another primary advance — a bullish sign for economic activity in the Eurozone.
* Target calculation: 28 + ( 28 – 22 ) = 34
Like a phoenix rising from the ashes, the DAX broke through resistance at 10000, signaling a fresh primary advance. A trough above zero on 13-Week Twiggs Momentum indicates continuation of the up-trend. The market is taking a positive view of expected quantitative easing (QE) by the European Central Bank (ECB).
* Target calculation: 10000 + ( 10000 – 9000 ) = 11000
France’s CAC-40 shows early signs of recovery, having broken through its descending trendline of recent months. Rising 13-week Twiggs Momentum suggests resumption of the primary up-trend. Recovery above 4500 would strengthen the signal, while breakout above 4600 would confirm.
Italy’s MIB Index remains weak, with 13-week Twiggs Momentum oscillating below zero. Respect of resistance is more likely, but breakout above 20000 would suggest a recovery.
Spain’s Madrid General Index also remains in the Doldrums, with declining 13-week Twiggs Momentum below zero. Only recovery above 1100 would provide cause for optimism.
Decline of inflation below zero for the Eurozone has forced the hand of the ECB. Announcement of significant QE is imminent. Expansion of the money supply should help to indirectly support stock prices. Unfortunately the Swiss National Bank, which held vast reserves of Euros because of its informal peg at 1.20 EUR/CHF, faced a difficult choice. Either go “all-in” to support the peg, and place their entire credit standing in question, or cut their losses (rumored to be around $70 billion) and walk away with their reputation a little worse for wear, but intact. Faced with the choice they had, in my opinion they took the correct option.
On the other side of the Channel, the Footsie is testing resistance at 6650. Recovery above the descending trendline would suggest the down-trend is over, especially if accompanied by recovery of 13-week Twiggs Momentum above zero. Strong resistance at 6900/7000 remains a major obstacle to a further advance.
One final paragraph of advice: do not burn yourselves out. Be as I am — a reluctant enthusiast… a part-time crusader, a half-hearted fanatic. Save the other half of yourselves and your lives for pleasure and adventure. It is not enough to fight for the land; it is even more important to enjoy it. While you can. While it’s still here. So get out there and hunt and fish and mess around with your friends, ramble out yonder and explore the forests, climb the mountains, bag the peaks, run the rivers, breathe deep of that yet sweet and lucid air, sit quietly for a while and contemplate the precious stillness, the lovely, mysterious, and awesome space. Enjoy yourselves, keep your brain in your head and your head firmly attached to the body, the body active and alive, and I promise you this much; I promise you this one sweet victory over our enemies, over those desk-bound men and women with their hearts in a safe deposit box, and their eyes hypnotized by desk calculators. I promise you this: You will outlive the bastards.
~ Edward Abbey
Germany’s DAX is broke support at 9600, warning of a correction to 9000 — and a weakening primary up-trend. Decline of 13-week Twiggs Money Flow below zero reflects (long-term) selling pressure. Breach of primary support at 8900/9000 would signal a primary down-trend. Recovery above 9800/10000 is unlikely at present, but would indicate another advance.
* Target calculation: 9750 + ( 9750 – 9000 ) = 10500
Deutsche Post AG (y_DPW.DE) serves as a bellwether for European markets. Deutsche Post DHL couriers holds a similar position to that of Fedex in US markets. The stock broke support at 24.00/25.00, completing a rounding top. Decline of 13-week Twiggs Money Flow below zero reflects (long-term) selling pressure. Target for the breakout is 20.00*. A down-trend warns of slowing economic activity.
* Target calculation: 24 – ( 28 – 24 ) = 20
Dow Jones Euro Stoxx 50 is retracing to test support at 3000/3100. Breach of support would suggest a decline to 2500 as indicated on the monthly chart. Respect of support, however, would indicate another advance.
* Target calculation: 3150 + ( 3150 – 3000 ) = 3300
A quarterly chart shows the Footsie consolidating in a long-term triangle below its previous high of 6950. Ascending triangles favor an upward breakout, but I would be cautious with the current outlook for Europe. Reversal below 6650 would warn of a correction to 6400/6500.
* Target calculation: 6900 + ( 6900 – 6500 ) = 7300
Germany’s DAX retreated below medium-term support at 9700, warning of a secondary correction. Follow-through below 9600 would confirm. Declining 21-day Twiggs Money Flow, below zero, indicates medium-term selling pressure. Breach of primary support at 8900/9000 is unlikely, but would warn of a primary down-trend. Recovery above 10000 is also unlikely at present, but would indicate an advance to 10500*. Respect of the long-term trendline at 9500 would indicate that momentum and the primary up-trend are intact.
* Target calculation: 9750 + ( 9750 – 9000 ) = 10500
Deutsche Post AG (y_DPW.DE) serves as a bellwether for European markets. Deutsche Post DHL couriers holds a similar position to that of Fedex in US markets. The stock formed a rounding top over the last year and is now testing primary support at 25.00. Breach of support would warn of a slow-down in economic activity.
The Footsie follows a similar path to the DAX in recent weeks. Reversal below 6700 would warn of a correction; follow-through below 6670 would confirm. Declining 21-day Twiggs Money Flow indicates selling pressure, but respect of the zero line would suggest long-term buying support. Recovery above 6800 is unlikely at present, but would suggest a rally to 6880. Breach of primary support is even less likely, but would signal reversal to a primary down-trend.
* Target calculation: 6800 + ( 6800 – 6400 ) = 7200
Bellwether transport stock Fedex has risen dramatically in recent weeks, reflecting the improving outlook for economic activity.
UPS has enjoyed a similar surge, as has Deutsche Post AG (which owns DHL).
