Dow Jones Industrial Average reversed below short-term support at 12000. Bearish divergence on 21-day Twiggs Money Flow warns of medium-term selling pressure — and a correction to test primary support at 10600. Reversal (of TMF) below zero and follow-through (of DJIA) below 11900 would strengthen the signal.
As the stock market moves down into the next daily cycle low and the selling pressure intensifies, this should drive the dollar index much higher. It remains to be seen if gold can reverse this pattern of weakness in the face of dollar strength, especially since the dollar will almost certainly be rallying violently during the intense selling pressure that is coming in the stock market.
via The Next Selling Wave Is About to Begin | Toby Connor | Safehaven.com.
When the dollar strengthens, gold normally falls. Except in times of high uncertainty (like the present), when demand for gold as a safe haven overcomes downward pressure from a stronger dollar. Buying gold at current prices is a bet that either Greece will default — a pretty safe bet — or that the Fed is again forced to use its printing press (not quite as certain).
The weekly TSX 60 chart respected resistance at 730 and is retreating to test support at 650/660. Decline of 13-week Twiggs Money Flow below zero warns of further selling pressure. Failure of support would offer a target of 590*.
* Target calculation: 660 – ( 730 – 660 ) = 590
Dow Jones Total Stock Market (TSM) India Index is testing resistance at 1825. 21-Day Twiggs Money Flow mostly below zero warns of medium-term selling pressure. Expect resistance to hold followed by another test of support at 1650.
* Target calculation: 1650 – ( 1800 – 1650 ) = 1500
The weekly SENSEX chart shows a similar story: the index retracing to test resistance at 17500, but 13-week Twiggs Money Flow below zero warning of strong selling pressure. Reversal below 16000 would offer a target of 14500*.
* Target calculation: 16000 – ( 17500 – 16000 ) = 14500
Dow Jones Singapore Index retreated Monday. 21-Day Twiggs Money Flow below zero warns of medium-term selling pressure. Failure of support is likely and would offer a target of 200*.
* Target calculation: 220 – ( 240 – 220 ) = 200
The ASX 200 is headed for another test of 4000. 21-Day Twiggs Money Flow holding below zero warns of strong medium-term selling pressure. Failure of support is likely and would offer a target of 3500*.
* Target calculation: 4000 – ( 4500 – 4000 ) = 3500
Dow Jones HongKong Index reversed below 400, warning of another down-swing. The secondary trendline and declining 63-day Momentum indicate that the sell-off is accelerating.
* Target calculation: 400 – ( 450 – 400 ) = 350
Weekly chart of the Shanghai Composite Index shows a primary down-swing to test support at 2300*. Reversal of 13-week Twiggs Money Flow below zero would warn of rising selling pressure. Failure of support would test the 2008 low of 1700.
* Target calculation: 2650 – ( 3000 – 2650 ) = 2300
The sell-off in Asian markets will impact on others with a strong mining sector: Australia, Brazil, South Africa and Canada.
Dow Jones Japan Index is testing long-term support at 50.00. 13-Week Twiggs Money Flow oscillating around zero indicates uncertainty; reversal below zero would warn of rising selling pressure. Breakout below 4800 would offer a target of 35.00*.
* Target calculation: 50 – ( 65 – 50 ) = 35
The Nikkei 225 Index is headed for a test of 7000* after breaking support at 9000 on the weekly chart.
* Target calculation: 9000 – ( 11000 – 9000 ) = 7000
Dow Jones South Korea Index is consolidating between 360 and 410 on the daily chart. 21-Day Twiggs Money Flow below zero warns of strong medium-term selling pressure. Downward breakout would offer a target of 290*.
* Target calculation: 360 – ( 430 – 360 ) = 290
The bear rally on the Brazilian Bovespa Index has run out of steam and we can expect another test of support at 48000. 13-Week Twiggs Money Flow below zero signals continued selling pressure. Failure would offer a target of 38000*.
* Target calculation: 48000 – ( 58000 – 48000 ) = 38000
The JSE bear rally respected resistance at 30000. Money Flow is stronger, but reversal below 28000 would offer a target of 26000*.
* Target calculation: 28000 – ( 30000 – 28000 ) = 26000
