Tag: MIB Index

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UK & Europe: Madrid at 2009 low

The monthly chart of the Madrid General Index is testing its 2009 low of 700. With unemployment rates (24.4 per cent) similar to the US Great Depression and more than half of Spaniards under 25 jobless, there is no recovery in sight. 63-Day Twiggs Momentum oscillating below zero indicates a strong primary down-trend. Failure of support at 700 would signal another primary decline.

Madrid General Index

* Target calculation: 750 – ( 900 – 750 ) = 600

Italy’s MIB Index is more resilient, with recovery of 13-week Twiggs Money Flow above zero indicating buying pressure. Expect another test of resistance at 17000.
Italy MIB Index
The CAC-40 monthly chart shows France in a similar fix. Failure of support at 3100 would indicate another test of primary support, close to the 2009 low of 2500. Recovery above 3600, however, would indicate another test of 4000 — especially if accompanied by recovery of 63-day Twiggs Momentum above 10%.
France CAC-40 Index

The German DAX respected support at 6500, confirming the primary up-trend. Rising 13-week Twiggs Money Flow indicates strong buying pressure. Expect another test of 7500.
Germany DAX Index

The FTSE 100 respected support at 5600 and breakout above 5800 would signal an advance to 6400*. The 13-week Twiggs Money Flow trough above the zero line indicates buying pressure. Reversal below 5600 is unlikely but would warn that the primary up-trend is weakening.

FTSE 100 Index

* Target calculation: 6000 + ( 6000 – 5600 ) = 6400

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UK & Europe: Italy threatens breakout

Italy’s MIB Index is testing resistance at 17,000 after several weeks narrow consolidation — signaling continuation of the up-trend. Rising 13-week Twiggs Money Flow indicates buying pressure.

MIB Index

* Target calculation: 17,000 + ( 17,000 – 14,000 ) = 20,000

Germany’s DAX is testing medium-term resistance at 7000. Upward breakout is likely and would indicate a test of 7500*.

DAX Index

* Target calculation: 6500 + ( 6500 – 5500 ) = 7500

The FTSE 100 Index also encountered resistance — as indicated by short candles below 6000 over the past four weeks and the triangle pattern on 13-week Twiggs Money Flow. Breakout above 6100 would signal a fresh primary advance, while reversal below the rising trendline would warn of a correction to primary support at 5000.

FTSE 100 Index

* Long-term target calculation: 6000 + ( 6000 – 5000 ) = 7000

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UK & Europe: Selling pressure

The FTSE 100 is running into resistance at 6000 — note the short weekly candles and bearish divergence on (medium-term) 21-day Twiggs Money Flow. Expect retracement to test the new band of support between 5600 and 5700. The primary trend, however, remains upward; so the target of 6100 is unchanged.

FTSE 100 Index

Germany’s DAX has also run into medium-term selling pressure, but remains in a strong primary up-trend with a target of 7500*.

DAX Index

* Target calculation: 6500 + ( 6500 – 5500 ) = 7500

Italy’s MIB Index is not yet in a primary up-trend, but narrow consolidation below 17000 suggests an upward breakout. Medium-term selling pressure is evident, however, even on the long-term 13-week Twiggs Money Flow, and failure of support at 16,000 would warn of another test of the primary band at 13,000 – 13,500.

MIB Index

* Target calculation: 17000 + ( 17000 – 14000 ) = 20000

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Europe: UK and Germany signal bull market

The FTSE 100 broke through resistance at 5750 to signal a primary up-trend. Rising 13-week Twiggs Money Flow indicates medium-term buying pressure. Target for the initial advance is 6300*.

FTSE 100 Index

* Target calculation: 5700 + ( 5700 – 5100 ) = 6300

Germany’s DAX also signals a primary up-trend, with a target of 7400* for the initial advance.

DAX Index

* Target calculation: 6400 + ( 6400 – 5400 ) = 7400

Italy’s MIB index lags behind, but breakout above 17000 would give a similar signal, with a target of 20000*.

FTSE MIB Index

* Target calculation: 17000 + ( 17000 – 14000 ) = 20000

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Europe approaches zero hour

As I mentioned in an earlier post, there is bound to be a relief rally when EU leaders announce details of their rescue package — followed by a pull-back when traders figure out the costs. The danger is that Germany and France do an “Ireland” and rescue the banks but put themselves at risk. Both have public debt to GDP ratios close to 80 percent and it would not take much to push them into the danger zone. A down-grade would raise their cost of funding and place their own budgets under pressure. If they are down-graded then the kids are home alone — there will be no adults left in the room.

The FTSE 100 displays a decent bullish divergence on 13-week Twiggs Money Flow, warning of strong buying pressure. Breakout above 5600 would offer a target of 6000*, but expect retracement to test the new support level. Respect would confirm the advance.

FTSE 100 Index

* Target calculation: 5500 + ( 5500 – 5000 ) = 6000

Germany’s DAX is headed for 6500, but a weaker recovery on Twiggs Money Flow suggests this is a bear market rally. Respect of 6500 would indicate another test of 5000.

DAX Index

The French CAC-40 index displays secondary buying pressure. Respect of 3700 would signal another test of primary support at 2800.

CAC-40 Index

Madrid rallied to test resistance at 900. Again buying pressure on 13-week Twiggs Money Flow appears secondary. Respect of 900 would signal a decline to the 2009 low of 700. Breakout, however, would signal a rally to test the descending trendline.

Madrid General Index

Italy’s MIB index is testing the descending trendline near 16500. Respect would test the 2009 low at 12500. Breakout would offer a target of 19000*.

FTSE MIB Index

* Target calculation: 16 + ( 16 – 13 ) = 19

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