The ASX 200 is headed for another test of support at 4000. Declining volume displays no evidence of bargain-buying. Failure of support is likely and would offer a target of 3500*.
* Target calculation: 4000 – ( 4500 – 4000 ) = 3500
JSE Overall Index retreats
The JSE Overall Index retreated below the former primary support level of 30000, strong volume [R] warning of selling pressure. Breach of the rising trendline would indicate another test of support at 28400. Failure of support would offer a target of 26000*, but this is not yet a foregone conclusion, with an up-tick in volume [S] indicating some buying support.
* Target calculation: 28.5 – ( 31 – 28.5 ) = 26
Euro tests primary support at $1.40
The euro broke its medium-term trendline against the dollar at [TX] and is headed for another test of primary support at $1.40. Failure of support would offer a target of $1.30*.
* Target calculation: 1.40 – ( 1.50 – 1.40 ) = 1.30
DAX breaks support
Dow Jones Germany Index broke support at 210/205 Monday, warning of another sharp fall as the ECB ramps up bond purchases and German participation in the bailout program is challenged in their High Court. Plunging 13-week Twiggs Money Flow indicates strong selling pressure. Target for the fall is the 2009 low of 150*.
* Target calculation: 200 – ( 250 – 200 ) = 150
The DAX Index similarly broke support at 5500, offering a target of 4500*.
* Target calculation: 5500 – ( 6500 – 5500 ) = 4500
DJ Japan selling pressure
DJ Japan Index is headed for another test of support at 49.50. 21-Day Twiggs Money Flow peaking below zero warns of strong selling pressure. Breach of support would offer a target of 45.50*.
* Target calculation: 49.50- ( 53.50 – 49.50 ) = 45.50
DJ South Korea also displays a strong primary down-trend. Breach of support at 365 would offer a target of 300*.
* Target calculation: 365 – ( 430 – 365 ) = 300
Dow Jones 30 Indian Titans
The DJ India 30 Titans Index displays strong selling pressure, with 13-week Twiggs Money Flow falling below zero. Reversal below support at 152 would offer a target of 136*.
* Target calculation: 152 – ( 168 – 152 ) = 136
ASX 200 headed for another test of 4000
Declining volume and strong red candles at the recent ASX 200 reversal warn of another test of 4000. Support at 4000 is unlikely to hold unless there is a strong spike in volume, similar to that in early August. Failure would offer a target of 3500*.
* Target calculation: 4000 – ( 4500 -4000 ) = 3500
A longer-term view of the All Ordinaries Index shows declining 13-week Twiggs Money Flow below zero, warning of selling pressure.
* Target calculation: 4000 – ( 4500 – 4000 ) = 3500
European rally meets resistance
The FTSE 100 index is meeting selling pressure in its rally to test resistance at 5600, evidenced by tall shadows on the last two candles. Reversal of 13-week Twiggs Money Flow below zero would strengthen the signal. Failure of support at 4800 would offer a target of 4000*.
* Target calculation: 4800 – ( 5600 – 4800 ) = 4000
The DAX Index also displays tall shadows on the last two weekly candles. The rally to test 6400 is particularly weak, with decline of 13-week Twiggs Money Flow below zero warning of strong selling pressure. Reversal below 5400 would offer a target of 4400*.
* Target calculation: 5400 – ( 6400 – 5400 ) = 4400
The CAC-40 displays similar selling pressure. Breakout below 2900 would offer a target of 2500*.
* Target calculation: 2900 – ( 3300 – 2900 ) = 2500
TSX60
TSX 60 Index is testing resistance at 725/735. 13-Week Twiggs Money Flow oscillating around zero indicates hesitancy. Resistance is likely to hold and reversal below the week’s low at 700 would warn of another test of support at 650/660. In the medium term, failure of support would offer a target of 580*.
* Target calculation: 650 – ( 720 – 650 ) = 580
Dow runs out of buyers
Dow Jones Industrial Average failed to reach resistance at 11900/12000. Low volumes indicate a lack of interest from buyers rather than large numbers of sellers. Expect a test of support at 10600 to 10800. A strong surge in volume would indicate buying support, but failure is more likely and would offer a target of 9600*.
* Target calculation: 10800 – ( 12000 – 10800 ) = 9600
The S&P 500 Index is similarly headed for a test of support at 1100/1120. 21-Day Twiggs Money Flow peaking below the zero line [bear] warns of strong selling pressure. Failure of support would offer a target of 1000*.
* Target calculation: 1120 – ( 1260 – 1120 ) = 980
The Nasdaq 100 Index fared better over the last few weeks, but a failed breakout above 2200 warns of another test of 2000. 13-Week Twiggs Money Flow reversal below zero would further strengthen the bear signal.
* Target calculation: 2000 – ( 2200 – 2000 ) = 1800