Tag: Fedex

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Signs of recovery

A strong blue candle on the S&P 500 daily chart suggests that the latest correction is over. Penetration of the descending trendline would confirm. 21-Day Twiggs Money Flow recovery above zero would strengthen the signal. Recovery above 2120 would signal an advance to 2200*. Look for confirmation from the Dow Jones Industrial Average and Transport sector.

S&P 500 Index

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

CBOE Volatility Index (VIX) at 13 indicates low risk typical of a bull market.

S&P 500 VIX

Dow Jones Industrial Average also shows signs of a recovery. Reversal above 18000 would confirm the correction is over. Breakout above 18300 would offer a target of 19000*. 13-Week Twiggs Money Flow holding above zero continues to signal a healthy primary up-trend. Breach of support at 17500 is unlikely, but would warn of a correction to test primary support (and trendline) at 17000.

Dow Jones Industrial Average

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

Bellwether transport stock, Fedex surged to test primary resistance at $184. Rising 13-week Twiggs Money Flow indicates buying pressure. Breakout would offer a target of 204* — a positive sign for the economy.

Fedex

* Target calculation: 184 + ( 184 – 164 ) = 204

A long tail on Canada’s TSX 60 suggests strong support at 855. Recovery above the descending trendline would indicate the correction is over. A 13-week Twiggs Momentum trough above zero would signal continuation of the primary up-trend, while breakout above 900 would offer a long-term target of 1000*.

TSX 60 Index

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

Europe

Germany’s DAX is testing support at 11000. Recovery above the descending trendline would indicate the correction is over. Declining 13-week Twiggs Money Flow continues to warn of selling pressure, but penetration of the descending trendline would also suggest that buyers are back in control. Reversal below 11000 is unlikely, but would offer a target of 10000*.

DAX

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

The Footsie is testing support at 6700/6750. Declining 13-week Twiggs Money Flow continues to warn of selling pressure, but penetration of the descending trendline would suggest the return of buyers. Breakout above 7100 would confirm a primary advance with a long-term target of 8000*. Reversal below 6700 is unlikely, but would warn of a primary down-trend.

FTSE 100

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

Asia

The Shanghai Composite broke 5000. The situation appears artificial, considering current economic data, and I believe the accelerating up-trend will lead to a blow-off.

Shanghai Composite Index

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

Retracement on Japan’s Nikkei 225 Index respected support at 20000, suggesting an advance to 22000*. Oscillation high above zero on 13-week Twiggs Momentum signals a strong primary up-trend.

Nikkei 225 Index

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

India’s Sensex is testing primary support at 26500. Rising 13-week Twiggs Money Flow indicates medium-term buying pressure, however, and recovery above zero would strengthen the signal. Respect of support and penetration of the descending trendline would suggest another primary advance. Breach of primary support is less likely, but would warn of a primary down-trend with support at 23000*.

SENSEX

* Target calculation: 26500 – ( 30000 – 26500 ) = 23000

Australia

“Unemployment has fallen to a one-year low of 6 per cent in May as an estimated 42,000 jobs were added to the economy last month.” ~ ABC News

The ASX 200 found support at 5500 after solid employment numbers and a rally in US markets. Recovery above 5650 and the descending trendline would indicate the correction is over, suggesting a fresh advance. Breakout above 6000 is still some way off but would offer a target of 6500*. Reversal below 5450 remains as likely, however, and would warn of a test of primary support at 5120/5150.

ASX 200

* Target calculation: 6000 + ( 6000 – 5500 ) = 6500

Moderate decline of 13-week Twiggs Money Flow indicates medium-term selling pressure, typical of a secondary correction not a reversal.

The Banking sector [XBAK] dragged the index lower over the last two months, but now faces solid support at its two-year low of 83. Twiggs Momentum (13-week) bearish divergence warns of a down-trend, but recovery above zero would suggest otherwise.

ASX 300 Banks


More….

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The law locks up the man or woman
Who steals the goose off the common
But leaves the greater villain loose
Who steals the common from the goose.

~ Medieval English ditty from Jeffrey Sachs The Impunity Trap

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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


More….

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Upsurge in global trade

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Jobs growth slows (slightly)

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


More….

Gold hesitant response to weak Dollar

Crude consolidates

Footsie breaks 15-year high

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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DAX surges ahead while others retreat

The DAX is headed for its long-term target of 12000 while most markets (other than Japan) undergo a correction.

The S&P 500 broke support at 2080, indicating a correction to test 2000. Breach of primary support is unlikely and another 13-week Twiggs Money Flow trough above zero would signal another advance.

S&P 500 Index

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

Dow Jones Industrial Average is similarly correcting to test primary support at 17000.

Dow Jones Industrial Average

CBOE Volatility Index continues to indicate low risk typical of a bull market.

S&P 500 VIX

Europe

Germany’s DAX broke resistance at 11500 and is headed for a test of the long-term target at 12000*. Expect further resistance, possibly a correction, at this level. Rising 13-week Twiggs Momentum indicates a strong up-trend.

DAX

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

The Footsie retreated from a test of its December 1999 high of 6950. 13-Week Twiggs Momentum oscillating around zero indicates further consolidation. Expect a test of support at 6500.

FTSE 100

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

Asia

China’s Shanghai Composite Index is consolidating between 3050 and 3400. Declining 13-week Twiggs Money Flow warns of medium-term selling pressure. Reversal below 3050 would warn of a decline to test the primary trendline at 2700. Breakout above 3400 is less likely, but would signal another primary advance.

Shanghai Composite Index

Breach of support at 24000 on Hong Kong’s Hang Seng Index warns of further weakness in China. Follow-through below 23000 would indicate a primary down-trend — and a stronger bear signal (for China).

Hang Seng Index

Japan’s Nikkei 225 Index is retracing to test new support at its 2007 high of 18000/18300. Rising 13-week Twiggs Momentum indicates a strong up-trend. Respect of support is likely and would signal an advance to 20000* — confirmed by follow-through above 19000.

Nikkei 225 Index

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

India’s Sensex faces stiff resistance at 30000. Bearish divergence on 13-week Twiggs Momentum warns the primary-trend is weakening, but not necessarily a reversal. This could be a mid-point consolidation. Retreat below 29000 indicates a correction. Follow-through below 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 found support at 5750. Recovery above 5850 would suggest the correction is over. Follow-through above 6000 would confirm another advance, with a target of 6250*. Declining 21-day Twiggs Money Flow indicates mild selling pressure. Breach of 5750 is less likely, but would warn of a correction to 5500.

ASX 200

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


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When good news is bad news

Crude in contango

Life is a school of probability.

~ Walter Bagehot (hat tip to Barry Ritholz)

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Market strength

Apart from China and India, major markets continue to look bullish.

The S&P 500 is retracing to test support at 2080/2100, but respect is likely and would confirm an advance to 2200*. Oscillation of 13-week Twiggs Money Flow high above zero indicates strong long-term buying pressure.

S&P 500 Index

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

A quarterly chart shows the Nasdaq 100 headed for its Dotcom high of 4800. Expect major resistance at this level. Correction back to 4000 and the primary trendline may provide a long-term buying opportunity.

Nasdaq 100 Index

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

S&P 500 VIX

Europe

Germany’s DAX found resistance at 11500. Expect retracement to test new support at 11000, but respect is likely and would confirm the target of 12000*. Rising 13-week Twiggs Money Flow indicates healthy buying pressure.

DAX

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

The Footsie is consolidating below its December 1999 high of 6950. 13-Week Twiggs Money Flow oscillating high above zero indicates long-term buying pressure. Breakout would signal a fresh primary advance, with a long-term target of 8000*. Follow-through above 7000 would confirm.

FTSE 100

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

Asia

China’s Shanghai Composite Index faces resistance at 3400. Declining 13-week Twiggs Money Flow warns of medium-term selling pressure. Reversal below 3050 would warn of a decline to test the primary trendline at 2700. Breakout above 3400 is less likely, but would signal another primary advance.

Shanghai Composite Index

Japan’s Nikkei 225 Index is likely to retrace to test new support at its 2007 high of 18000/18300. Rising 13-week Twiggs Money Flow indicates buying pressure. Respect is likely and would signal an advance to 20000*.

Nikkei 225 Index

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

India’s Sensex encountered stiff resistance at 30000. Declining 13-week Twiggs Money Flow indicates medium-term selling pressure. Reversal below 28000 would warn of a correction to 26500/27000. Respect of the primary trendline would establish a solid base for further advances, otherwise we may see an extended consolidation below 30000.

SENSEX

Australia

The ASX 200 encountered resistance at 6000, retracing to test support at 5850. 13-Week Twiggs Money Flow continues to reflect healthy buying pressure. Respect of support would indicate continuation of the advance, towards 6150*. Follow-through above 6000 would confirm. Breach of 5850 is less likely, but would warn of a correction back to the rising trendline, around 5650.

ASX 200

* Target calculation: 5650 + ( 5650 – 5150 ) = 6150

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The rally continues

Apart from China and India, last week’s broad market rally is going strong, with the S&P 500 and the DAX making new highs.

The S&P 500 broke resistance at 2100. Expect retracement to test the new support level, but respect is likely to confirm an advance to 2200*. Rising 13-week Twiggs Money Flow indicates medium-term buying pressure.

S&P 500 Index

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

CBOE Volatility Index is declining, indicating low risk typical of a bull market.

S&P 500 VIX

Europe

Germany’s DAX broke resistance at its medium-term target of 11000*. Expect retracement to test the new support level. Respect of support would indicate trend strength and a medium-term target of 11500 (10000-8500). Rising 13-week Twiggs Momentum troughs above zero predict a strong up-trend.

DAX

* Target calculation: 10000 + ( 10000 – 9000 ) = 11000

The Footsie is testing its December 1999 high of 6950. Breakout would signal a fresh primary advance, with a long-term target of 8000*. Follow-through above 7000 would confirm. Momentum is rising, but it will take considerable impetus to make a new high.

FTSE 100

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

Asia

China’s Shanghai Composite Index faces considerable resistance at 3400. Declining 13-week Twiggs Money Flow warns of medium-term selling pressure. Reversal below 3050 would warn of a decline to test the primary trendline at 2700.

Shanghai Composite Index

Is the Chinese economy a one-trick pony or will economic growth continue when the infrastructure boom ends?

Japan’s Nikkei 225 Index broke resistance at its 2007 high of 18000/18300. Rising 13-week Twiggs Money Flow reflects buying pressure. Expect retracement to test the new support level, but target for the advance is 20000*.

Nikkei 225 Index

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

India’s Sensex is testing resistance at 30000, but declining 13-week Twiggs Momentum over the last 6 months warns the primary up-trend is weakening. A healthy correction to 26500/27000 (signaled by breach of support at 28000) would re-establish a solid base, otherwise the index may struggle to break 30000.

SENSEX

Australia

The ASX 200 is consolidating between 5850 and 5950. The narrow range is a bullish sign and breakout above 5950 would indicate continuation of the advance to 6150*. Rising 13-week Twiggs Money Flow indicates buying pressure. Reversal below support at 5850 is unlikely, but would warn of a correction.

ASX 200

* Target calculation: 5650 + ( 5650 – 5150 ) = 6150

Alexander Hamilton started the U.S. Treasury with nothing, and that was the closest our country has ever been to being even.

~ Will Rogers

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Broad market rally

Major indices across the US, Europe and Japan are displaying strong performance. China and India appear to be encountering stronger resistance, but should also be buoyed by the broad recovery.

Bellwether transport stock Fedex (FDX) is headed for another test of resistance at $182/$184. Breakout would signal a primary advance, with a target of $200*, indicating that economic activity is improving.

Fedex

* Target calculation: 184 + ( 184 – 168 ) = 200

The S&P 500 is testing resistance at 2100. Breakout would offer a medium-term target of 2200*. Rising 13-week Twiggs Money Flow indicates medium-term buying pressure. Respect of 2100 is unlikely, but would suggest another test of primary support at 2000.

S&P 500 Index

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

The Nasdaq 100 successfully penetrated resistance at 4300/4350, signaling an advance to 4500*. Oscillation of 13-week Twiggs Money Flow high above zero suggests strong buying pressure. Expect retracement to test the new support level, but breach is unlikely and would warn of another correction.

Nasdaq 100 Index

* Target calculation: 4300 + ( 4300 – 4100 ) = 4500

CBOE Volatility Index broke out below the recent triangle, indicating risk has reverted from Moderate to Low.

S&P 500 VIX

Europe

Germany’s DAX is testing resistance at 11000*. Rising 13-week Twiggs Momentum troughs above zero indicate a strong up-trend. Retracement that respects medium-term support at 10600 would strengthen the bull signal.

DAX

* Target calculation: 10000 + ( 10000 – 9000 ) = 11000

The Footsie is also testing long-term resistance at 6900. Breakout would signal a fresh primary advance, with a long-term target of 8000*. Follow-through above 7000 would confirm. Momentum is rising, but it will take considerable impetus to break through the December 1999 high of 6950.

FTSE 100

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

Asia

China’s Shanghai Composite Index found support at 3050, but declining 13-week Twiggs Money Flow warns of medium-term selling pressure. Respect of resistance at 3400 is likely. Reversal below 3050 would warn of a test of the primary trendline at 2700. The stimulus effect of lower energy prices may cushion the fall but economic activity is declining.

Shanghai Composite Index

Japan’s Nikkei 225 Index continues to test resistance at its 2007 high of 18000. Rising 13-week Twiggs Money Flow reflects medium-term buying pressure. Breakout above 18000 would signal another primary advance, with a target of 20000*.

Nikkei 225 Index

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

India’s SENSEX found support at 28000 and recovery above 29000 signals another test of 30000. A lower peak on 13-week Twiggs Money Flow reflects medium-term selling pressure. Respect of resistance at 30000 is likely, while breach of support at 28000 would test primary support at 26500.

SENSEX

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

Australia

The ASX 200 is headed for a test of 6000 after breaking out of the recent flag continuation pattern. Rising 21-day Twiggs Money Flow indicates short-term buying pressure. Reversal below support at 5850 is unlikely, but would warn of a correction.

ASX 200

* Target calculation: 5650 + ( 5650 – 5150 ) = 6150

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S&P 500 up-trend continues

The S&P 500 encountered solid support at 2000. Rising 13-week Twiggs Money Flow indicates buying pressure. Recovery above the descending trendline is likely and would indicate the end of the correction. Breakout above 2080 would confirm another advance with a target of 2200*. Failure of support is unlikely, but would test the primary trendline at 1900.

S&P 500

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

CBOE Volatility Index (VIX) retreated below 20, reassuring that risk remains low to moderate.

VIX Index

Bellwether transport stock Fedex continues in a primary up-trend, signaling that economic activity levels are improving.

Fedex

Small caps also remain in an up-trend, with the Russell 2000 consolidating between 10.50 and 12.0. Retreat of 13-week Twiggs Momentum close to the zero line is typical of a ranging market. Breakout above 12.00 would signal a primary advance with a target of 13.0*; follow-through above 12.10 would confirm. Reversal below 10.50 is unlikely, but would warn of a bear market.

Russell 2000

* Target calculation: 12 + ( 12 – 11 ) = 13

Victory attained by violence is tantamount to a defeat, for it is momentary.
~ Mahatma Gandhi

Posted on

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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