Spot gold is testing short-term support at $1750/ounce as the greenback strengthens. Breach of the rising trendline would suggest that the advance is losing momentum — and breakout below $1700 would signal another test of primary support at $1600. Respect of $1700 is less likely, but would signal an advance to $1900.
* Target calculation: 1800 + ( 1800 – 1700 ) = 1900
Dow Jones Shanghai Index is also hesitant, with no advance over the last 3 trading days. Reversal below 304 would indicate a test of primary support at 284. Breakout above the descending trendline — and resistance at 330 — is unlikely with 21-day Twiggs Money Flow (respect of the zero line from below) warning of selling pressure.
The TSX 60 is testing the band of resistance from 720 to 730 and the descending trendline. Upward breakout would indicate that the primary down-trend is weakening, while respect would warn of another test of primary support. The sharp rise on 13-week Twiggs Money Flow indicates buying pressure, but there is no sign yet of a reversal.
* Target calculation: 650 – ( 720 – 650 ) = 580
The Kiwi respected the band of resistance at $0.80/$0.82 against the greenback, warning of a primary decline. Earlier breach of the rising trendline strengthens the signal. Failure of support at $0.75 would offer a target of $0.70.
* Target calculation: 0.75 – ( 0.80 – 0.75 ) = 0.70
CRB Commodities Index is testing the descending trendline at 320. Breakout would suggest that the down-trend has weakened and the index is forming a bottom; respect would indicate another test of primary support at 295. Breach of the long term rising trendline would warn of another test of 2009 lows at 200.
Brent crude is also testing its descending trendline, at $110/barrel. Respect would signal another test of primary support at $99, while breakout would suggest that the down-trend has ended. In the long-term, breach of the rising trendline would warn of a decline to around $70/barrel.
The Dollar Index is consolidating below resistance at 77.50. Breach of the descending trendline suggests the correction is over and recovery of 63-day Twiggs Momentum above the zero line indicates that the primary trend remains upward. Breakout above 77.50 would offer a medium-term target of 80*.
* Target calculation: 77.50 + ( 77.50 – 75.00 ) = 80.00
Dow Jones Japan Index weakened Monday, warning of another test of primary support at 48.
Dow Jones South Korea Index had a stronger breakout, but is also now retracing. Respect of support would confirm the up-trend, while reversal below 400 would signal weakness.
HongKong’s Hang Seng Index broke its secondary descending trendline at 19000, indicating a test of the primary trendline at 21000/22000.
* Target calculation: 19 + ( 19 – 16 ) = 22
The Shanghai Composite Index recovered above support at 2350. Breakout above its secondary trendline would also test the primary trendline around 2900.
Dow Jones HongKong Index shows retracement to test short-term support on Monday. Respect of the rising trendline would signal trend strength, while failure of support at 360 would signal another decline.
The ASX 200 broke out above its descending trendline — warning that the down-trend was ending — but ran into selling pressure. Bearish divergence on 21-day Twiggs Money Flow confirms the tall shadow on Friday’s candle. Respect of support at 4100 would suggest a primary up-trend, while failure would re-test primary support at 3850.
* Target calculation: 4300 + ( 4300 – 3900 ) = 4700
Support levels are clearer on the weekly chart.
Canada’s TSX 60 index is headed for a test of resistance at 720/730 on the weekly chart. Expect a retracement. Respect of the trendline would warn of another test of primary support. Breakout above the descending trendline would signal that the primary down-trend has weakened and a bottom is forming. A 13-week Twiggs Money Flow trough that respects the zero line would indicate strong buying pressure.
* Target calculation: 720 + ( 720 – 640 ) = 800
* Target calculation: 720 + ( 720 – 640 ) = 800
