The strong advance on the US Dollar Index continues. Now that the index has reached its current target of 79, expect retracement to test the new support level at 76. Respect of support would confirm the primary up-trend and offer a target of 84* for the next advance. A trough above zero on 63-day Momentum would strengthen the signal.
* Target calculation: 80 + ( 80 – 76 ) = 84
Spot gold is testing support at $1600/ounce, but the primary trend remains upward. Expect a rally to the declining trendline. Breakout above $1700 would indicate the correction is weakening, while failure of support would test $1500*.
* Target calculation: 1700 – ( 1900 – 1700 ) = 1500
Amex Gold Bugs Index, representing un-hedged gold stocks, is testing primary support at 500. Failure of support would warn of a reversal in the primary trend and would be a bearish sign for spot metal prices.
The ASX 200 recovered slightly after a weak opening on Tuesday. Expect another test of 4000 but the index looks destined to continue in the lower half of its trend channel, with 21-day Twiggs Money Flow (holding below zero) warning of medium-term selling pressure. Target for the decline is 3500*.
* Target calculation: 4000 – ( 4500 – 4000 ) = 3500
The Hang Seng index is falling steeply, with 13-week Twiggs Money Flow below zero warning of selling pressure. Target for the current-down-swing is 16000*.
* Target calculation: 19 – ( 22 – 19 ) = 16
The Shanghai Exchange is closed for Chung Yeung Festival, but the Shanghai Composite Index was testing support at 2350 on Friday. Failure of support would offer a long-term target of 1800*.
* Target calculation: 2400 – ( 3000 – 2400 ) = 1800
The NZX 50 index is testing resistance at 3350 after bullish divergence on 21-day Twiggs Money Flow. The index fell sharply at Tuesday’s open but had recovered all of its lost ground by the close. Breach of the declining trendline indicates that the primary trend is weakening. Breakout above 3350 would indicate another test of the May 2011 high at 3580. Reversal below 3250 is unlikely, but would re-test primary support at 3100.
Dow Jones Japan Index broke support at 4900, warning of another primary decline. 63-Day Twiggs Momentum holding below zero confirms a strong primary down-trend.
* Target calculation: 51 – ( 58 – 51 ) = 64
Dow Jones South Korea Index gapped sharply lower at the open, prompting a brief trading halt on the Korean exchange. 21-day Twiggs Money Flow holding below zero warns of strong (medium-term) selling pressure. Failure of support at 360 would test 330 in the short-term, but the calculated target is 290*.
* Target calculation: 360 – ( 430 – 360 ) = 290
Canada’s TSX 60 index broke support at 650, while declining 13-week Twiggs Money Flow signals rising selling pressure. Expect another down-swing with a target of 580*.
* Target calculation: 650 – ( 720 – 650 ) = 580
The FTSE 100 is testing support at 5000. Failure would warn of a down-swing to 4400*, but long tails and rising 21-day Twiggs Money Flow indicate medium-term buying pressure. Respect of support is likely and would continue the line between 5000 and 5450.
* Target calculation: 5000 – ( 5600 – 5000 ) = 4400
Germany’s DAX index displays similar medium-term buying pressure on 21-day Twiggs Money Flow. Respect of support at 5000 is likely and recovery above 5700 would indicate another bear rally.
* Target calculation: 5000 – ( 6000 – 5000 ) = 4000
Dow Jones Industrial Average is testing the band of support between 10600 and 10800. An up-tick in volume indicates some buying support but this appears insufficient to withstand downward pressure. Failure of support at 10600 is likely and would signal a primary decline to 10000*.
* Target calculation: 11000 – (12000 – 11000 ) = 10000
The S&P 500 index is similarly testing support at 1100, while 21-day Twiggs Money Flow declining below zero warns of selling pressure. Breach of 1100 would signal a primary decline to 950*.
* Target calculation: 1100 – ( 1250 – 1100 ) = 950
The NASDAQ 100 is headed for a test of support at 2040. Reversal of 13-week Twiggs Money Flow below zero warns of a primary down-trend. Breach of support would signal another decline with a target of 1700*.
* Target calculation: 2000 – ( 2300 – 2000 ) = 1700
The euro is testing short-term support against the greenback at $1.35/1.34. 63-Day Momentum (declining below zero) reminds we are in a primary down-trend. Failure of support would signal a decline to $1.30*.
* Target calculation: 1.40 – ( 1.50 – 1.40 ) = 1.30
The dollar has benefited from safe haven demand, commencing a primary advance as the euro falls. 63-Day Twiggs Momentum crossed to above zero, confirming the primary up-trend. Further retracement to test the new support level at 76.00 is likely, but respect would demonstrate strong buying support.
* Target calculation: 76 + ( 76 – 73 ) = 79
