The Footsie (FTSE 100) is testing support at 6700. Narrow candlestick bodies for the last two weeks signal indecision, while declining Twiggs Money Flow warns of medium-term selling pressure. Breach of 6700 would warn of a correction to 6500. Respect of support is less likely but would indicate another test of 7100.
Spain’s Madrid General Index broke resistance at 900, indicating a long-term advance to 1050* (960* in the medium-term). Rising 13-week Twiggs Money Flow indicates buying pressure. Reversal below 840 is unlikely, but would warn of a bull trap.
* Target calculation: 900 + ( 900 – 750 ) = 1050; 900 + ( 900 – 840 ) = 960
Germany’s DAX is similarly testing resistance at 8500. Breakout would offer a medium-term target of 9000* and a long-term target of 9500*. Recovery of 13-week Twiggs Momentum above 10% would also signal continuation of the primary up-trend.
* Target calculation: 8500 + ( 8500 – 8000 ) = 9000; 8500 + ( 8500 – 7500 ) = 9500
France’s CAC-40 is testing resistance at 4120. Breakout would offer a medium-term target of 4300*, but follow-through above its 2011 high at 4200 would also confirm a long-term advance to 4500*. Reversal below 3900 is unlikely but would warn of a bull trap.
* Target calculation: 4100 + ( 4100 – 3900 ) = 4300; 4050 + ( 4050 – 3600 ) = 4500
Italy’s MIB Index is also testing resistance, at 17700. Money Flow indicates strong buying pressure and breakout above 18000 would signal a long-term advance to 20000*. Reversal below 16500 is most unlikely, but would again warn of a bull trap.
* Target calculation: 17500 + ( 17500 – 15000 ) = 20000
The FTSE 100 is far more subdued, encountering resistance at 6600 after an end to the recent correction. Follow-through above 6700 would signal a medium-term advance to the 1999 high of 7000*, but reversal below 6500 would warn of another test of medium-term support at 6400. Failure of 6400, while unlikely, would test primary support at 6000.
The FTSE 100 followed-through above initial resistance at 6500, indicating another test of 6700/6750. Breakout above 6750 would offer a target of 7500*, but bearish 13-week Twiggs Money Flow continues to warn of selling pressure. Reversal below 6400 would warn of a test of primary support at 6000.
* Target calculation: 6750 + ( 6750 – 6000 ) = 7500
Germany’s DAX respected support at 8000, indicating another test of stubborn resistance at 8500. Declining momentum suggests the primary up-trend is slowing. Reversal below support at 8000 would confirm, while breakout above 8500 would offer a long-term target of 9000*.
* Target calculation: 8400 + ( 8400 – 7800 ) = 9000
US markets are closed for Labor Day. The S&P 500 ended last week testing its rising trendline and support at 1630. Breach would reinforce the bearish divergence on 21-day Twiggs Money Flow, indicating a test of primary support at 1560. Recovery above the descending trendline is unlikely at present, but would warn the correction is ending. In the long-term, failure of primary support would offer a target of 1400*.
* Target calculation: 1550 – ( 1700 – 1550 ) = 1400
VIX below 20 suggests a bull market.
The FTSE 100 closed above initial resistance at 6500. Follow-through would suggest the correction is over and another attempt at 6750 likely. Strong bearish divergence on 13-week Twiggs Money Flow, however, warns of selling pressure and breakout above 6750 is unlikely. Reversal below 6400 would warn of a test of primary support at 6000.
Germany’s DAX encountered stubborn resistance at 8500. Reversal below 8000 would test primary support at 7600, while breakout above 8500 would offer a target of 9000*.
* Target calculation: 8400 + ( 8400 – 7800 ) = 9000
Japan’s Nikkei 225 recovered above 13500 and follow-through above the descending trendline would suggest the correction is over and another test of resistance at 15000 is likely. Reversal below 13200, however, would indicate a test of primary support at 12500. Earlier bearish divergence on 13-week Twiggs Money Flow warns of long-term selling pressure.
China’s Shanghai Composite is testing resistance at 2100/2120. Bearish divergence on 13-week Twiggs Money Flow warns of selling pressure. Reversal below 2050 would indicate another test of primary support at 1950. Breakout above 2200 and the descending trendline is unlikely, but would suggest that the down-trend is ending.
India’s Sensex encountered strong support at 18000/18500, evidenced by the long tails on the weekly candles and rising 13-week Twiggs Money Flow. Expect another test of resistance at 20500. Follow-through above 19000 would strengthen the signal.
The ASX 200 is headed for a test of 5250 after breaking resistance at 5150. Rising 13-week Twiggs Money Flow indicates medium-term buying pressure. Breakout above 5250 would be a welcome sign, suggesting another primary advance, but respect of resistance and a lower peak on Twiggs Money Flow would warn of a reversal.
* Target calculation: 5250 + ( 5250 – 4750 ) = 5750
Monthly charts best reflect the state of play in Europe. Germany and France are improving but there are still pockets of weakness elsewhere that threaten to destabilize the monetary union.
Germany’s DAX recovered above its 2007 high at 8200. Reversal below 8000 would indicate hesitancy, with another test of primary support (and rising trendline) at 7600. But the up-trend is intact and follow-through above 8500 would offer a long-term target of 9500*. Momentum is slowing but 13-week Twiggs Momentum holding above zero suggests continuation of the up-trend.
* Target calculation: 8500 + ( 8500 – 7500 ) = 9500
The FTSE 100 fell through support at 6500 but the long tail indicates buying pressure. Reversal below 6400 would confirm a correction to the rising trendline. Breakout above 6750 would signal an advance to the 1999 high of 7000, but strong bearish divergence on 13-week Twiggs Money Flow warns of a correction. Breach of primary support at 6000 would signal a reversal.
France’s CAC-40 is headed for another test of its 2011 high at 4200. Breakout would offer a long-term target of 4800*. Reversal below 3600 is unlikely but would signal a primary down-trend.
* Target calculation: 4200 + ( 4200 – 3600 ) = 4800
Italy’s MIB Index is testing resistance at 18000. Momentum is weakening so one needs to be prepared for another correction. But breakout would offer a target of 21000*.
* Target calculation: 18000 + ( 18000 – 15000 ) = 21000
Adam Taylor at Business Insider quotes Tim Parks from New York Review of Books:
If Nixon had refused to accept impeachment and had tried somehow to hang on to power, he would have been summarily removed. The same goes for any leader in Europe’s main democracies. Most will step down at the first sign of a serious criminal charge against them, aware that their parties will not support someone who damages their cause. The truly disquieting aspect of the present situation in Italy is not so much Berlusconi’s brazenness, but that his blackmail is possible and credible, that he has such complete control over such a large political party, and that he still commands considerable popular support. Astonishing as it may seem to those not familiar with the country, even serious newspapers and respectable commentators seem reluctant to insist on the enforcement of law, rarely mentioning the details of his crimes and actually giving credence to the argument that removing Berlusconi from the political scene would amount to disenfranchising the millions of voters who supported him at the previous election, as if there was no autonomous party in parliament to represent their views, as if they were not free to choose another leader before the next election.
The Joker may still have the last laugh.
Reproduced with thanks to Vincos on Flickr.com.
Spain’s Madrid General Index is testing resistance at 900. Momentum is weakening so, again, be prepared for another correction. But breakout above 900 would indicate an advance to 1050*.
* Target calculation: 900 + ( 900 – 750 ) = 1050
Germany’s DAX recovered above the 2007 high at 8200. Follow-through above 8500 would offer a long-term target of 9500*. Rising 13-week Twiggs Money Flow indicates buying pressure. Reversal below 8000 is now unlikely, but would warn of another test of primary support at 7700.
* Target calculation: 8500 + ( 8500 – 7500 ) = 9500
The FTSE 100 is consolidating between 6500 and the 2007 high of 6750. Breakout above 6750 would signal an advance to the 1999 high of 7000. Bearish divergence on 13-week Twiggs Money Flow, however, warns of a correction. Reversal below 6500 is likely, and would indicate a test of 6000.
Spain’s Madrid General Index is testing resistance at 900. Long-term 13-week Twiggs Money Flow remains weak, but breakout above 900 would indicate an advance to 1050*.
* Target calculation: 900 + ( 900 – 750 ) = 1050
Germany’s DAX recovered above its 2007/2008 high at 8200, signaling a primary advance with a long-term target of 9500*. Breach of resistance at 8500 would confirm. 13-Week Twiggs Money Flow is above zero, but remains weak, warning of further retracement to test support at 8000. Reversal below 8000 is unlikely, but would warn of another test of the rising trendline around 7700.
* Target calculation: 8500 + ( 8500 – 7500 ) = 9500
The FTSE 100 is testing resistance at the 2008 high of 6750. Breakout would signal an advance to 7500*. Follow-through above the 1999/2000 high at 7000 would confirm. Respect of 6750 would indicate further consolidation above primary support at 6000.
* Target calculation: 6750 + ( 6750 – 6000 ) = 7500
Italy’s MIB Index respected primary support at 15000. Breakout above resistance at 16000 indicates another test of 17500. Repeated troughs above zero on 13-Week Twiggs Money Flow suggest a healthy up-trend.
Spain’s Madrid General Index displays a weaker retracement above long-term support at 760, while 13-Week Twiggs Money Flow below zero indicates selling pressure. Breakout below 760 would warn of a test of the 2012 low at 600. Respect of support, however, would indicate another rally to 880* — especially if accompanied by breakout above 820 or 13-week TMF recovery above zero.
* Target calculation: 820 + ( 820 – 760 ) = 880
Dow Jones Europe Index is ranging between 270 and 290 on the weekly chart, indicating a weak advance after earlier breaking long-term resistance at 265. Breakout above 290 would signal continuation, but reversal below 270 remains as likely and would warn of a reversal; confirmed if the index follows-through below 265.
The FTSE 100 broke resistance at 6500 (from the March 2013 peak), indicating an advance to 6900. But tall shadows (or candlewicks) on Thursday and Friday warn of short-term selling pressure and reversal of 21-day Twiggs Money Flow below zero strengthens the signal. Breach of support at 6400 would warn of another test of primary support at 6000.
* Target calculation: 7000 + ( 7000 – 6000 ) = 8000
Germany’s DAX gapped above the declining trendline, signaling another primary advance, with a target of 9300*. Breach of resistance at 8500 would confirm. Recovery of 21-day Twiggs Money Flow above zero indicates medium-term buying pressure. Reversal below 8000 is unlikely, but would warn of another test of 7700.
* Target calculation: 8500 + ( 8500 – 7700 ) = 9300
The FTSE 100 respected its rising trendline and long-term support at 6000, indicating another test of 6750. Bearish divergence on 13-week Twiggs Money Flow, however, continues to warn of selling pressure. Retreat below 6000 would signal a primary reversal.
Germany’s DAX also signals strong selling pressure, but recovery above 8000 would suggest another primary advance. Continued respect of the long-term rising trendline reflects a healthy up-trend.
Italy’s MIB Index respected primary support at 15000. Follow-through above 15500 would indicate another test of 17500. Respect of the zero line by 13-week Twiggs Money Flow indicates healthy buying pressure.
Spain’s Madrid General Index is edging lower, while 13-week Twiggs Money Flow falling below zero warns of strong selling pressure. Recovery above 800 would suggest another weak rally, while failure of support at 750/760 would offer a long-term target of the 2012 low at 600*.
* Target calculation: 750 – ( 900 – 750 ) = 600
10-Year Treasury yields broke resistance at 2.50% as bond-holders offload their positions. Expect weak retracement to test the new support level at 2.00%, but recovery above 2.50% is likely and would signal a long-term advance to test resistance at 4.00%. Breakout above 4.00% would end the 31-year secular bear-trend. Rising yields reflect market expectations that the economy will recover, enabling the Fed to curtail further quantitative easing.
The S&P 500 broke support at 1600 and is undergoing a correction to test the long-term rising trendline at 1500. Twiggs Money Flow reflects moderate selling and the primary up-trend looks secure.
My concern is: can the US withstand negative sentiment from global markets? The rising VIX is not yet cause for alarm, with the market shrugging off the last foray above 20, but a spike above 25 would warn of elevated risk.
The TSX Composite broke support at 11900/12000 to signal a primary down-trend. Falling 13-week Twiggs Money Flow continues to warn of selling pressure. Expect a test of the 2012 low at 11250.
The FTSE 100 is testing the rising trendline and support at 6000. Bearish divergence on 13-week Twiggs Money Flow warns of a reversal. Failure of support at 6000 would strengthen the signal.
Germany’s DAX is headed for a test of the long-term trendline and primary support at 7400/7500. Bearish divergence on 13-week Twiggs Money Flow continues to warn of selling pressure. Breach of 7400 would signal reversal to a primary down-trend.
