Europe rebounds

Dow Jones Euro Stoxx 50 broke through resistance at 3180, signaling an advance to 3350*. Completion of a 13-week Twiggs Momentum trough above zero would confirm strong buying pressure. Reversal below 3150 is unlikely, but would warn of a bull trap.

Dow Jones Euro Stoxx 50

* Target calculation: 3150 + ( 3150 – 2950 ) = 3350

DAX breakout above 9800 would signal an advance to 10600* — though there is bound to be some resistance at 10000. Recovery of 13-week Twiggs Money Flow above the descending trendline would suggest that medium-term selling pressure is easing. Reversal below 9400 is unlikely, but would indicate another test of primary support at 9000.

DAX

DAX Volatility at 15 indicates low risk typical of a bull market.

DAX

The Footsie is testing medium-term resistance at 6700. 13-Week Twiggs Money Flow oscillating above zero indicates healthy (long-term) buying pressure. Reversal below the rising trendline is unlikely, but would test primary support at 6400. Breakout above 6850 is not yet likely, but would offer a target of 7200*.

FTSE 100

* Target calculation: 6800 + ( 6800 – 6400 ) = 7200

Europe under pressure

Bearish (Twiggs Momentum) divergence on Dow Jones Euro Stoxx 50 suggests that a top is forming. Breach of support at 2950 or reversal of 13-week Twiggs Momentum below zero would signal a primary down-trend. Recovery above 3100, however, would suggest another advance and follow-through above 3180 would confirm.

Dow Jones Euro Stoxx 50

* Target calculation: 3150 + ( 3150 – 2950 ) = 3350

Germany’s DAX respected primary support at 9000, but may be headed for a second test. Bearish divergence on 13-week Twiggs Money Flow continues to warn of medium-term selling pressure. Breach of support would signal a primary down-trend.

DAX

A DAX Volatility rise above 20 would signal moderate risk.

DAX

The Footsie is at short-term support at 6500. Failure is likely, and would test the primary level at 6400. Declining 21-day Twiggs Money Flow below zero indicates medium-term selling pressure.

FTSE 100

* Target calculation: 6800 + ( 6800 – 6400 ) = 7200

Europe: Tensions rising

Moscow’s MICEX index plunged over the last two weeks as tensions rise over the fate of Crimea and the Ukraine.

MICEX

Countries neighboring Ukraine, such as Poland, have also suffered from increased uncertainty. The Warsaw WIG index is testing primary support at 50,000. Follow-through below 49,500 would signal a primary down-trend.

Warsaw WIG

Germany’s DAX is also testing primary support, at 9000. Failure would signal a primary down-trend. Bearish divergence on 13-week Twiggs Money Flow continues to warn of medium-term selling pressure.

DAX

Rising DAX Volatility, above 20, reflects moderate risk.

DAX

The Footsie is headed for another test of primary support (6400) after breaking 6700. Breach would signal a down-trend, but respect of support remains as likely.

FTSE 100

* Target calculation: 6800 + ( 6800 – 6400 ) = 7200

A monthly chart shows the Euro testing its long-term descending trendline at $1.39. Follow-through above $1.39 seems incongruous at present, but would signal an advance to $1.44*. Bearish divergence on 13-week Twiggs Momentum continues to warn of medium-term weakness, however, and reversal below $1.37 would indicate another correction.

Euro

* Target calculation: 1.36 + ( 1.36 – 1.28 ) = 1.44

Euro strong but European stocks retreat

The Euro broke through resistance at $1.38, signaling an advance to $1.43*. Retracement that respects the new support level would strengthen the signal. Bearish divergence on 13-week Twiggs Momentum continues to warn of medium-term weakness, however, and reversal below $1.38 would suggest another correction.

Euro

* Target calculation: 1.38 + ( 1.38 – 1.33 ) = 1.43

Germany’s DAX retreated below 9500 to warn of another correction. Bearish divergence on 13-week Twiggs Money Flow indicates medium-term selling pressure. Respect of primary support at 9000 — and the rising trendline — would confirm a healthy up-trend. Breach of support is unlikely, but would signal reversal to a down-trend.

DAX

DAX Volatility at 20 reflects moderate risk.

DAX

The Footsie retreated to support at 6690/6700 on the daily chart. Breach would indicate another test of primary support at 6400. The primary trend is upward and a 21-day Twiggs Money Flow trough above zero would reflect medium-term buying pressure.

FTSE 100

* Target calculation: 6800 + ( 6800 – 6400 ) = 7200

Footsie signals buying pressure

The FTSE 100 is testing resistance at 6850. Rising troughs above zero on 13-week Twiggs Money Flow signal buying pressure. Breakout would encounter further resistance at the 1999 high of 7000, so the calculated target of 7200 may be unrealistic. Reversal below 6700 is unlikely, but would test primary support at 6400.

FTSE 100

* Target calculation: 6800 + ( 6800 – 6400 ) = 7200

London Calling…..

The strong advance for Sterling, over the last 8 months, is likely to encounter substantial resistance at the 2011 and 2009 highs of $1.68 and $1.70 respectively. Resistance also coincides with the target of $1.68* from the double bottom completed in September 2013. Breakout above $1.70 would offer a long-term target of $1.90, but reversal below $1.66 would test support at $1.62 in the short-term.

FTSE 100

* Target calculation: 1.58 + ( 1.58 – 1.48 ) = 1.68

The FTSE 100 is likely to break out above resistance at 6850 after a higher trough on 13-week Twiggs Money Flow flagged a surge in buying pressure. Target for an advance is 7200* but expect committed sellers at the 1999 high of 7000. Retreat below primary support at 6400 is most unlikely, but would warn of a primary down-trend.

FTSE 100

* Target calculation: 6800 + ( 6800 – 6400 ) = 7200

Footsie recovering

The FTSE 100 is headed for another test of 6850 after recovering above 6600. Completion of a higher trough above zero on 13-week Twiggs Money Flow would flag buying pressure. Failure of primary support at 6400 is unlikely, but would warn of a primary down-trend.

FTSE 100

* Target calculation: 6800 + ( 6800 – 6400 ) = 7200

Footsie finds support

The FTSE 100 found support at 6400 and the rising trendline. Recovery above 6600 would indicate another test of 6850. Rise of 13-week Twiggs Money Flow trough above 17% (the most recent high) would strengthen the signal. Failure of support at 6400 is unlikely, but would warn of a primary down-trend.

FTSE 100

* Target calculation: 6700 + ( 6700 – 6400 ) = 7000

Footsie warns of correction

The FTSE 100 retreated below short-term support at 6700 after a false break above 6800, signaling a correction to test primary support at 6400. Bearish divergence on 13-week Twiggs Money Flow warns of long-term selling pressure. Recovery above 6800 is unlikely, but would signal a fresh advance.

FTSE 100

* Target calculation: 6800 + ( 6800 – 6400 ) = 7200

Footsie breaks out

The FTSE 100 broke resistance at 6800, indicating a test of long-term resistance at 6950/7000. Completion of another 13-week Twiggs Money Flow trough above zero would signal long-term buying pressure. Retracement to test the new support level at 6800 is likely. Respect would strengthen the bull signal. Reversal below 6700 is unlikely, but would warn of a correction.

FTSE 100

* Target calculation: 6700 + ( 6700 – 6400 ) = 7000