Tag: support

Posted on

European indices warn of another down-swing

The German DAX Index broke support at 5500 to warn of a down-swing to 4500*. Declining 13-week Twiggs Money Flow below zero indicates strong selling pressure.

German DAX index

* Target calculation: 5500 – ( 6500 – 5500 ) = 4500

In France, the CAC-40 Index reversed below support at 3000, led by a sell-off in French banks. Expect support at the 2009 low of 2500, though the calculated target is even lower. 13-Week Twiggs Money Flow again signals strong selling pressure.

France CAC-40 Index

* Target calculation: 3000 – ( 3700 – 3000 ) = 2300

The FTSE 100 is consolidating above 5000, but is likely to be dragged lower if major European trading partners fall. Breach of support would offer a target of 4400*.

UK FTSE 100 Index

* Target calculation: 5000 – ( 5600 – 5000 ) = 4400

Posted on

Dow acid-test

The Dow is headed for the band of support between 10600 and 10800 — a real acid-test. Support is likely to fail unless we see a substantial increase in volume, indicating buying support. Breach of 10600 would confirm another down-swing with a target of 10000*.

Dow Jones Industrial Average

* Target calculation: 11000 – ( 12000 – 11000 ) = 10000

Posted on

Aussie Dollar weakens

The Aussie Dollar is testing support at $1.045 against the greenback; failure would warn of another down-swing to parity*. Breakout above $1.075, however, would re-visit $1.10.

AUDUSD

* Target calculation: 1.05 – ( 1.10 – 1.05 ) = 1.00

AUDUSD is strongly influenced by commodity prices and closely tracks the CRB Commodities Index. $CRB is rising and breakout above 350 would indicate a primary advance to 385* — suggesting increased support for the Aussie Dollar.

CRB Commodities Index

* Target calculation: 350 + ( 350 – 315 ) = 385

Posted on

Crude rising

The Brent Crude rally since mid-August is now testing the descending trendline at $115/barrel. Breakout above this level would warn that the down-trend is ending. Recovery above $120 would signal a fresh primary advance. Rising crude prices are a negative sign for economic recovery, placing a further damper on consumer spending. Reversal below support at $105, however would signal a decline to $90*.

Brent Crude Afternoon Markers

* Target calculation: 105 – ( 120 – 105 ) = 90

Posted on

Gold finds support at $1800/ounce

Spot gold found short-term support at $1800/ounce. A rally to $1900 from this point would form a bullish ascending triangle, suggesting an upward breakout and offering a target of $2100*. Failure of support, however, would penetrate the rising (secondary) trendline and suggest a correction to $1500.

Spot Gold

* Target calculation: 1900 + ( 1900 – 1700 ) = 2100

Gold Bugs ($HUI) and Gold Miners ($GDX) Indexes both broke through resistance to signal a fresh primary advance. With a target of 700 for $HUI, the breakout favors continuation of the current advance in spot prices.

Amex Gold Bugs Index $HUI

* Target calculation: 600 + ( 600 – 500 ) = 700

Posted on

GBP tests support

The Pound is testing support at $1.60/$1.59 against the greenback, dragged down by rising calls for another round of quantitative easing to assist the flagging UK economy. Failure of support would signal a primary down-trend with a target of $1.53*.

GBPUSD

* Target calculation: 1.60 – ( 1.67 – 1.60 ) = 1.53

Posted on

Euro tests support

Germany’s high court threw Chancellor Merkel a lifeline, ruling that bailouts of struggling euro-countries are legal in terms of the German constitution. But they also created an obstacle to further assistance, requiring that parliament vote on any future bailout decisions. [WSJ]

The euro continues to test support at $1.40 against the greenback. Failure would signal a primary down-trend with a target of $1.30*.

EURUSD

* Target calculation: 1.40 – ( 1.50 – 1.40 ) = 1.30

Posted on

Dollar rallies

The Dollar Index rallied strongly but expect stubborn resistance between 76.00 and 76.50. Consolidation between 73.00 and 76.50 has continued for more than four months, but we are in a bear trend and downward breakout remains likely. Failure of support at 73.00 would offer a target of 70.00*. Any hint of quantitative easing in the next FOMC announcement, on September 21st,  would accelerate the sell-off.

Dollar Index

* Target calculation: 73 – ( 76 – 73 ) = 70

Posted on

Denial is not a river in Egypt

Dow Jones Industrial Average rallied, suggesting a second higher low above primary support at 10600/10800.  Expect a test of 11900/12000, but this does not mean the bear market is about to reverse. We are still in the early “denial stage” of the bear market, identified by sporadic bargain-hunting, high volatility and a general lack of direction. Declining volume indicates a lack of enthusiasm from buyers and sellers. Failure of primary support would change that, leading to a sharp fall to 10000*.

Dow Jones Industrial Average

* Target calculation: 11000 – ( 12000 – 11000 ) = 10000

Powered by WordPress / WordPress Maintenance Service By Website Helper