Tag: Shanghai Composite Index

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Asia: Sleeping tigers awaken

Hong Kong’s Hang Seng Index broke long-term resistance at 24000, signaling a primary advance with an intermediate target of 27000*. The recent 13-week Twiggs Money Flow trough at zero indicates long-term buying pressure. Expect retracement to test the new support level. Reversal below 24000 is unlikely, however, and would warn of a correction to the rising trendline.

Hang Seng Index

* Long-term target calculation: 24000 + ( 24000 – 21000 ) = 27000

Singapore’s Straits Times Index likewise broke resistance at 3300, signaling a primary advance to 3600*. Rising 13-week Twiggs Money Flow indicates medium-term buying pressure. Again, expect retracement to test the new support level, but reversal below 3200 is unlikely and would warn of another test of primary support at 3000.

Straits Times Index

* Target calculation: 3300 + ( 3300 – 3000 ) = 3600

China’s Shanghai Composite Index broke resistance at 2150 as the PBOC aggressively injects bank credit to revive a flagging economy. This may lift the medium-term outlook, but is not sustainable in the long-term and could well aggravate the eventual contraction. Rising 13-week Twiggs Money Flow indicates medium-term buying pressure. Breakout above 2250 would confirm a primary up-trend. Reversal below 2100 is unlikely at present, but would warn of another test of primary support at 1990/2000.

Shanghai Composite Index

* Target calculation: 2000 – ( 2150 – 2000 ) = 1850

India’s Sensex is retracing to test the new support level at 26000. Breach would indicate a test of 25000. Bearish divergence on 13-week Twiggs Money Flow warns of selling pressure. Failure of support at 25000 would warn of a correction to the primary trendline at 23000. Respect of (or recovery above) 26000, however, would offer a target of 27000*.

Sensex

* Target calculation: 21000 + ( 21000 – 15000 ) = 27000

Japan’s Nikkei 225 is testing 15500. Breakout from the consolidation of recent weeks would indicate a rally to 16000*. Oscillation of 13-week Twiggs Money Flow above zero indicates healthy long-term buying pressure. Reversal below 15000 is unlikely, but would warn of another test of primary support at 14000.

Nikkei 225

* Target calculation: 15000 + ( 15000 – 14000 ) = 16000

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Sleeping tigers: Hang Seng and Straits Times threaten breakout

A monthly chart shows Hong Kong’s Hang Seng Index headed for a test of long-term resistance at 24000. A 13-week Twiggs Money Flow trough at zero indicates long-term buying pressure. Breakout above 24000 would signal a primary advance with a medium-term target of 27000*. Reversal below 21000 and the rising trendline is unlikely, but would warn of reversal to a primary down-trend.

Hang Seng Index

* Long-term target calculation: 24000 + ( 24000 – 21000 ) = 27000

Singapore’s Straits Times Index is testing resistance at 3300. Rising 13-week Twiggs Money Flow indicates medium-term buying pressure. Breakout above 3300 would signal a primary advance to 3600*. Respect of resistance is less likely, but reversal below 3200 would warn of another test of primary support at 3000.

Straits Times Index

* Target calculation: 3300 + ( 3300 – 3000 ) = 3600

China’s Shanghai Composite Index remains on an upward path after the PBOC lifted bank credit. Rising 13-week Twiggs Money Flow indicates medium-term buying pressure. Follow-through above 2090/2100 would suggest another test of 2150. Failure of primary support at 1990/2000 is unlikely at present, but would warn of a decline to 1850*.

Shanghai Composite Index

* Target calculation: 2000 – ( 2150 – 2000 ) = 1850

India’s Sensex respected support at 25000. Follow-through above 25700 would signal another test of resistance at 26000/26200. Breakout would offer a target of 27000*. Oscillation of 21-day Twiggs Money Flow around zero warns of hesitancy. Reversal below 25000 is less likely, but would warn of a correction to the primary trendline, around 23000.

Sensex

* Target calculation: 21000 + ( 21000 – 15000 ) = 27000

Japan’s Nikkei 225 is finding support at 15000/15200. Declining 21-day Twiggs Money Flow shows medium-term selling pressure typical of a consolidation; respect of zero would suggest another advance. Recovery above 15500 would confirm, offering a target of the December 2013 high at 16300. Reversal below 15000, however, would warn of another test of primary support at 14000.

Nikkei 225

* Target calculation: 15000 + ( 15000 – 14000 ) = 16000

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China dousing the flames with gasoline

The PBOC is dousing the flames with gasoline, adding further credit to prevent a slow-down. The longer this goes on, the more precarious their situation will become.

Shanghai Composite Index lifted above 2060/2065, indicating continuation of the rally to 2090. Rising 21-day Twiggs Money Flow troughs above zero signal strong medium-term buying pressure. Breakout above 2090/2100 would suggest another test of 2150. Failure of primary support at 1990/2000 is unlikely, but would warn of a decline to 1850*.

Shanghai Composite Index

* Target calculation: 2000 – ( 2150 – 2000 ) = 1850

India’s Sensex retraced to test support at 25000 after reaching its target of 26000. Respect would signal continuation of the advance, but 21-day Twiggs Money Flow below zero warns of selling pressure. Breach of support would warn of a correction to the primary trendline, around 23000.

Sensex

* Target calculation: 21000 + ( 21000 – 16000 ) = 26000

The weekly chart of Japan’s Nikkei 225 (21-day Twiggs Money Flow) shows the index consolidating below 15500. 13-Week Twiggs Money Flow holding above zero signals long-term buying pressure. Breakout above 15500 would test the December 2013 high at 16300. Reversal below 15000 is less likely, but would warn of another test of primary support at 14000.

Nikkei 225

* Target calculation: 15000 + ( 15000 – 14000 ) = 16000

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Market bullish despite Europe bank worries

  • S&P 500 advance to 2000 likely.
  • Europe warns of correction.
  • China further consolidation expected.
  • ASX 200 hesitant.

US market sentiment remains bullish, while Europe hesitates on Portuguese banking worries. As Shane Oliver observed: “Could there be a correction? Yes. Is it start of new bear mkt? Unlikely. Bull mkts end with euphoria, not lots of caution like there is now…”

The S&P 500 found support between 1950 and 1960, as evidenced by long tails on the last two candles, and is likely to advance to the psychological barrier of 2000. 21-Day Twiggs Money Flow recovery above the descending trendline would confirm that short-term selling pressure has ended. Expect retracement at the 2000 level, but short duration or narrow consolidation would suggest another advance. Reversal below 1950 is unlikely, but would warn of a correction to 1900 and the rising trendline.

S&P 500

* Target calculation: 1900 + ( 1900 – 1800 ) = 2000

CBOE Volatility Index (VIX) remains at low levels indicative of a bull market.

S&P 500 VIX

Dow Jones Euro Stoxx 50 broke support at 3200/3230, warning of a correction to the primary trendline at 3000. Solvency doubts over struggling Portuguese Banco Espirito Santo have roiled European markets. Descent of 21-Day Twiggs Money Flow below zero indicates medium-term selling pressure. Recovery above 3230 is unlikely at present.

Dow Jones Euro Stoxx 50

* Target calculation: 3150 + ( 3150 – 3000 ) = 3300

China’s Shanghai Composite Index displays strong medium-term buying pressure, with 21-day Twiggs Money Flow troughs above zero. Follow-through above 2060 would indicate another test of 2090. Breach of primary support is unlikely at present, but would signal a decline to 1850*. Further ranging between 2000 and 2150 is expected — in line with a managed “soft landing”.

Shanghai Composite

* Target calculation: 2000 – ( 2150 – 2000 ) = 1850

The ASX 200 found support at 5450 and appears headed for another test of resistance at 5550. 21-Day Twiggs Money Flow oscillating around zero, however, continues to indicate hesitancy. Reversal below 5450 would signal another test of 5350, while breakout above 5550 would suggest a long-term advance to 5800*.

ASX 200

* Target calculation: 5400 + ( 5400 – 5000 ) = 5800

Posted on

Market bullish despite Europe bank worries

  • S&P 500 advance to 2000 likely.
  • Europe warns of correction.
  • China further consolidation expected.
  • ASX 200 hesitant.

US market sentiment remains bullish, while Europe hesitates on Portuguese banking worries. As Shane Oliver observed: “Could there be a correction? Yes. Is it start of new bear mkt? Unlikely. Bull mkts end with euphoria, not lots of caution like there is now…”

The S&P 500 found support between 1950 and 1960, as evidenced by long tails on the last two candles, and is likely to advance to the psychological barrier of 2000. 21-Day Twiggs Money Flow recovery above the descending trendline would confirm that short-term selling pressure has ended. Expect retracement at the 2000 level, but short duration or narrow consolidation would suggest another advance. Reversal below 1950 is unlikely, but would warn of a correction to 1900 and the rising trendline.

S&P 500

* Target calculation: 1900 + ( 1900 – 1800 ) = 2000

CBOE Volatility Index (VIX) remains at low levels indicative of a bull market.

S&P 500 VIX

Dow Jones Euro Stoxx 50 broke support at 3200/3230, warning of a correction to the primary trendline at 3000. Solvency doubts over struggling Portuguese Banco Espirito Santo have roiled European markets. Descent of 21-Day Twiggs Money Flow below zero indicates medium-term selling pressure. Recovery above 3230 is unlikely at present.

Dow Jones Euro Stoxx 50

* Target calculation: 3150 + ( 3150 – 3000 ) = 3300

China’s Shanghai Composite Index displays strong medium-term buying pressure, with 21-day Twiggs Money Flow troughs above zero. Follow-through above 2060 would indicate another test of 2090. Breach of primary support is unlikely at present, but would signal a decline to 1850*. Further ranging between 2000 and 2150 is expected — in line with a managed “soft landing”.

Shanghai Composite

* Target calculation: 2000 – ( 2150 – 2000 ) = 1850

The ASX 200 found support at 5450 and appears headed for another test of resistance at 5550. 21-Day Twiggs Money Flow oscillating around zero, however, continues to indicate hesitancy. Reversal below 5450 would signal another test of 5350, while breakout above 5550 would suggest a long-term advance to 5800*.

ASX 200

* Target calculation: 5400 + ( 5400 – 5000 ) = 5800

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Commodities weak except for crude

  • Chinese stocks test long-term support
  • Commodities weaken
  • Crude oil remains high

China’s Shanghai Composite Index continues to test long-term support. 13-Week Twiggs Momentum holding below zero suggests continuation of the primary down-trend.

Shanghai Composite Index

Commodity prices are weakening, with Dow Jones-UBS Commodity Index breaking support at 133 to warn of another test of long-term support at 122/124. Reversal of 13-week Twiggs Momentum below zero would strengthen the signal.

Dow Jones UBS Commodities Index

Crude oil remains strong. The chart below plots WTI Light Crude over the consumer price index. The ratio is well above the historical average and is acting as a significant hand-brake on the post-GFC recovery.

Nymex WTI Crude

Considering the holes made in GDP (the green line) by crude oil spikes over the last 40 years, you can understand why Janet Yellen is reluctant to raise interest rates despite falling unemployment.

Nymex WTI Crude

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Asia: India leads but China & Japan improving

China’s Shanghai Composite Index retraced to test the new support level at 2050. A 21-day Twiggs Money Flow trough above zero signals strong medium-term buying pressure. Respect of support is likely and would signal a rally to 2090/2100. Failure is unlikely, but would test primary support at 1990/2000.

Shanghai Composite Index

* Target calculation: 2000 – ( 2150 – 2000 ) = 1850

Divergence on Japan’s Nikkei 225 (21-day Twiggs Money Flow) warns of medium-term selling pressure and another test of support at 15000. Respect of 15000 would confirm a rally to 16000*. Failure is unlikely, but would warn of another test of primary support at 14000.

Nikkei 225

* Target calculation: 15000 + ( 15000 – 14000 ) = 16000

India’s Sensex reached its target of 26000. Expect retracement to test the new support level at 25700/26000, but a 21-day Twiggs Money Flow trough above zero signals strong buying pressure. Breach of support is unlikely, but would warn of a correction to 25000. Further advances are likely, with a medium-term target of 27000.

Sensex

* Target calculation: 21000 + ( 21000 – 16000 ) = 26000

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What a difference a week makes

Summary:

  • S&P 500 advances toward 2000.
  • China respects primary support.
  • ASX 200 rallies.
  • Understanding momentum.

Market sentiment shifted significantly to the bull side after some solid employment numbers. There are still concerns about low interest rates across the US and other major economies, but these policies are likely to continue — with corporate earnings remaining buoyant — for the foreseeable future. And as Eddy Elfenbein observed: “…market corrections solely due to valuation are fairly rare. If the market’s dropping, earnings usually are too.”

The S&P 500 is advancing towards the psychological barrier of 2000. Weekly (13-week) Twiggs Money Flow recovered above its descending trendline and Daily (21-day) is trending higher, signaling medium-term buying pressure. Expect retracement at the 2000 level, but short duration or narrow consolidation would indicate continued buying pressure and another advance. Reversal below 1950 is unlikely, but would warn of a correction to the rising trendline.

S&P 500

* Target calculation: 1900 + ( 1900 – 1800 ) = 2000

Buoyed by Fed monetary policy, CBOE Volatility Index (VIX) is at extremely low levels, indicative of a bull market.

S&P 500 VIX

The Shanghai Composite Index respected primary support at 1990/2000 and rising Twiggs Money Flow indicates medium-term buying pressure. Follow-through above 2080 would indicate another test of 2150. Further ranging between 2000 and 2150 is expected — in line with a managed “soft landing”. Breach of primary support is unlikely at present, but would signal a decline to 1850*.

Shanghai Composite

* Target calculation: 2000 – ( 2150 – 2000 ) = 1850

The ASX 200 is headed for another test of resistance at 5550 while an up-turn on 13-week Twiggs Money Flow suggests medium-term buying pressure. Twiggs Money Flow has been descending for some time, indicating long-term selling pressure, but failure to breach the zero line suggests buying support and completion of another trough above zero — with a rise above 20% — would confirm the resumption of long-term buying pressure. Breakout above 5550 would offer a long-term target of 5850*. Reversal below support at 5350 is unlikely, but would warn of a down-trend.

ASX 200

* Target calculation: 5400 + ( 5400 – 5000 ) = 5800

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Enough to make Gazputin grin

  • Chinese stocks drift lower
  • Crude oil rising
  • Other commodities weak

China’s Shanghai Composite Index continues to drift lower on the long-term, monthly chart.

Shanghai Composite Index

Apart from crude oil, commodity prices have fared little better. But crude plays such a dominant role in most commodity indices that they appear more buoyant. Dow Jones-UBS Commodity Index rallied to 140 before retracing for another test of primary support. Oscillation of 13-week Twiggs Momentum around zero, however, does not suggest a significant trend.

Dow Jones UBS Commodities Index

Crude oil is doing a lot better, heading for another test of $110/barrel on the back of supply threats from geo-political tensions. The ascending triangle is very large, but breakout would suggest a long-term target of the 2008 high at $145*.

Brent Crude and Nymex Crude

* Target calculation: 110 + ( 110 – 75 ) = 145

…Enough to make even Gazputin grin.

Vladimir Putin

Read more at Bloomberg, June 2013: Gazprom’s Demise Could Topple Putin

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