Dow Jones Shanghai Index broke support at 440. Expect more government efforts, near the close, to shore up support. As futile as attempting to hold back the tide. Target for the breakout is 330*.
* Target calculation: 440 – ( 550 – 440 ) = 330
ASX selling pressure
The ASX 200 is falling sharply despite strong performance in China. Breach of the rising trendline (around 5400) would indicate a correction to test the primary trendline around 5000. The support level is indistinct because of frequent back-filling and could establish anywhere between 5300 and 5450. Reversal of 13-week Twiggs Money Flow below zero after a bearish divergence warns of strong selling pressure. Respect of support at the secondary trendline is therefore unlikely.
* Target calculation: 5650 + ( 5650 – 5450 ) = 5850
The ASX 200 VIX is rising, but low levels remain typical of a bull market.
Dow Jones Shanghai Index continues to make strong gains since commencing a primary up-trend, but expect further resistance between 310 and 315, at the 2013 high.
S&P 500 recovers but Europe remains weak
- Europe continues to test support.
- S&P 500 recovers.
- VIX continues to indicate a bull market.
- China bullish.
- ASX 200 recovers.
Dow Jones Europe Index continues to test its primary trendline and support at 315/325. 13-Week Twiggs Momentum below zero warns of a primary down-trend. Breach of primary support at 315 would confirm.
The S&P 500 recovered above 1950, suggesting another test of resistance at 2000. Recovery of 13-week Twiggs Money Flow above its July high would suggest that buyers have taken control. Reversal below 1900 is unlikely, but would warn that the primary trend is slowing.
* Target calculation: 1500 + ( 1500 – 750 ) = 2250
CBOE Volatility Index (VIX) remains low, suggesting a bull market.
Dow Jones Shanghai Index is testing resistance at 295. Breakout would confirm a primary up-trend. Respect of resistance, however, would indicate further consolidation.
ASX 200 recovery above 5550 also suggests another advance. Respect of zero by 13-week Twiggs Money Flow would strengthen the signal. Reversal below 5450 is unlikely, but would warn of another test of primary support.
* Target calculation: 5400 + ( 5400 – 5000 ) = 5800
S&P 500 recovers but Europe remains weak
- Europe continues to test support.
- S&P 500 recovers.
- VIX continues to indicate a bull market.
- China bullish.
- ASX 200 recovers.
Dow Jones Europe Index continues to test its primary trendline and support at 315/325. 13-Week Twiggs Momentum below zero warns of a primary down-trend. Breach of primary support at 315 would confirm.
The S&P 500 recovered above 1950, suggesting another test of resistance at 2000. Recovery of 13-week Twiggs Money Flow above its July high would suggest that buyers have taken control. Reversal below 1900 is unlikely, but would warn that the primary trend is slowing.
* Target calculation: 1500 + ( 1500 – 750 ) = 2250
CBOE Volatility Index (VIX) remains low, suggesting a bull market.
Dow Jones Shanghai Index is testing resistance at 295. Breakout would confirm a primary up-trend. Respect of resistance, however, would indicate further consolidation.
ASX 200 recovery above 5550 also suggests another advance. Respect of zero by 13-week Twiggs Money Flow would strengthen the signal. Reversal below 5450 is unlikely, but would warn of another test of primary support.
* Target calculation: 5400 + ( 5400 – 5000 ) = 5800
Shanghai rally
Dow Jones Shanghai Index rallied Monday, headed for another test of resistance at 270/272. Momentum is rising, but only recovery above 282/284 (with TMO above zero) would signal a trend change. Further consolidation is more likely, ranging between 258 and 284. Downward breakout, unlikely at present, would warn of a decline to 240*.
* Target calculation: 260 – ( 280 – 260 ) = 240
Shanghai near double bottom
Dow Jones Shanghai index continues its strong performance. Breakout above 285 would complete a double bottom reversal, signaling a primary up-trend. Respect of resistance is more likely, but would still be bullish if followed by narrow consolidation.
Shanghai breakout
Dow Jones Shanghai index also exerts a positive influence, with a strong breakout above medium-term resistance at 271. Resistance at 284 is some way off, but would complete a double bottom reversal.
ASX signals correction despite Shanghai rally
Dow Jones Shanghai Index penetrated its (secondary) descending trendline today, suggesting an up-swing to test resistance between 298 and 304 at the upper trend channel. Reversal below 282 and the lower trend channel is unlikely, but would warn of another test of primary support at 248.
The ASX 200, however, broke its rising trendline and short-term support at 5200, warning of a correction to primary support at 4650. Breach of medium-term support at 5000 would further strengthen the signal.
China: Controlled descent
China’s Shanghai Composite Index monthly chart displays controlled descent rather than free-fall, declining in layers of roughly 200 points since early 2010. After breaking support at 2000, expect a decline to 1800*. Oscillation of 63-day Twiggs Momentum below zero reflects the primary down-trend. Recovery above 2000 is most unlikely but would suggest a bear trap.
* Target calculation: 2000 – ( 2200 – 2000 ) = 1800
The Shenzhen Composite Index offers a target of 600* after breaking support at 800 on the monthly chart. 13-Week Twiggs Money Flow below zero indicates selling pressure.
* Target calculation: 800 – ( 1000 – 800 ) = 600
Hong Kong’s Hang Seng Index respected resistance at 22000. Bearish divergence on 13-week Twiggs Money Flow warns of medium-term selling pressure. Reversal below 21000 would indicate a test of the rising trendline at 20000. Recovery above 22000 is unlikely at present but would signal an advance to 24000*
* Target calculation: 22 + ( 22 – 20 ) = 24
China: Shanghai breaks support
China’s Shanghai Composite Index followed the DJ Shanghai Index, breaking primary support at 2000 to warn of a down-swing to 1850*. Completion of another 63-day Twiggs Momentum peak, this time deep below zero, would indicate a strong primary down-trend. Recovery above 2000 is unlikely but would suggest a bear trap.
* Target calculation: 2000 – ( 2150 – 2000 ) = 1850
Dow Jones Shanghai Index earlier broke support at 250, signaling a primary decline. 13-Week Twiggs Money Flow below zero warns of selling pressure.
* Target calculation: 250 – ( 270 – 250 ) = 230
Hong Kong’s Hang Seng Index is far stronger, testing resistance at 22000. But a sharp fall on 13-week Twiggs Money Flow warns of medium-term selling pressure. Breakout above 22000 would signal an advance to 24000* but reversal below 21000 is as likely and would indicate a test of the rising trendline at 20000.
* Target calculation: 22 + ( 22 – 20 ) = 24