Tag: Twiggs Momentum

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Dollar declines, gold and commodities rise

The Dollar Index retraced to test the new support level at 76.00. Respect would confirm the primary up-trend, while failure would signal trend weakness. A trough above zero on 63-day Twiggs Momentum would strengthen the bull signal.

Dollar Index

* Target calculation: 80 + ( 80 – 76 ) = 84

Gold broke through $1700/ounce in response to dollar weakness. Expect retracement to test the new support level. Respect would signal a primary advance to 1800*. The long-term (primary) trend remains upward.

Spot Gold

* Target calculation: 1700 + ( 1700 – 1600 ) = 1800

The Amex Gold Bugs Index is testing medium-term resistance at 560. Breakout would test the upper border of broadening wedge pattern — around 650 — and support a similar advance for the spot metal.

Amex Gold Bugs Index

Brent crude is also stronger, testing its upper trend channel at $110/barrel. Respect would indicate another test of the lower channel — and the ascending long-term trendline — while breakout would signal an advance to $120*.

IPE Brent Afternoon Markers

* Target calculation: 110 + ( 110 – 100 ) = 120

The broader CRB Commodities Index is also headed for its upper trend channel. The ascending primary trendline remains intact but 63-day Twiggs Momentum respect of the zero line (from below) warns of a strong down-trend.

CRB Commodities Index

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Asia monthly charts

Monthly charts help fit the current market action into a long-term perspective. The Nikkei 225 index broke support at 9000 and is likely to test the 2009 low of 7000*. 63-Day Twiggs Momentum respecting the zero line (from below) confirms the primary down-trend.

Nikkei 225 Index

* Target calculation: 9000 – ( 11000 – 9000 ) = 7000

The Seoul Composite found (primary) support at 1650/1700, followed by a reaction to 1900. Declining 13-week Twiggs Money Flow warns of selling pressure. Respect of resistance at 1900 is likely, which would indicate another test of primary support.

Seoul Composite Index

* Target calculation: 1700 – ( 1900 – 1700 ) = 1500

The Shanghai Composite index is testing support at 2400. Failure would confirm the strong primary down-trend signaled by declining 63-day Twiggs Momentum.

Shanghai Composite Index

* Target calculation: 2500 – ( 3500 – 2500 ) = 1500

The Hang Seng index is retracing to test resistance at 20000. Declining 13-week Twiggs Money Flow warns of selling pressure. Respect of resistance, would indicate another test of 16000.

Hang Seng Index

* Target calculation: 16 – ( 20 – 16 ) = 12

India’s SENSEX is headed for a test of resistance at 17500/18000 after a small bullish divergence on 13-week Twiggs Money Flow indicated buying pressure. Respect of 18000 would warn of another test of 16000.

SENSEX Index

* Target calculation: 16 – ( 18 – 16 ) = 14

Singapore’s Straits Times Index is in a similar position. Respect of resistance at 2900 would signal another test of 2500. Failure of support would confirm the strong primary down-trend signaled by declining 63-day Twiggs Momentum.

Singapore Straits Times Index

* Target calculation: 2500 – ( 2900 – 2500 ) = 2100

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ASX weekly chart

Just a reminder that the ASX is still in a bear market. Bullish divergence on 13-week Twiggs Money Flow indicates buying pressure on the All Ords and the index is testing the descending trendline. Breakout above 4400 would signal that a bottom has formed, while reversal below 4200 would warn of another test of primary support at 3900.

All Ordinaries Index

The ASX 200 weekly chart shows a similar picture, but 63-day Twiggs Momentum deep below zero warns that it may be some time before this bear (market) goes back into hibernation.

ASX 200 Index

* Target calculation: 5600 – ( 6600 – 5600 ) = 5100

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Gold monthly chart

Spot gold remains in a strong primary up-trend on the monthly chart. Breakout below support at $1500 — or a 63-day Twiggs Momentum cross to below zero — would warn of a reversal, but respect of $1500 support would indicate another primary advance with a target of 2300*.

Spot Gold Monthly

* Target calculation: 1900 + (1900 – 1500 ) = 2300

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Commodities long-term trend

Brent crude is edging lower in a wide trend channel. Respect of the long-term ascending trendline (on the weekly chart) would suggest upward breakout from the channel — and a target of $150/barrel*. Recovery of 63-day Twiggs Momentum above zero would strengthen the signal.

Crude Oil

* Target calculation: 125 + ( 125 – 100 ) = 150

The CRB Commodities index is similarly testing its long-term rising trendline at 300. Penetration of the secondary descending trendline would indicate another primary advance on the monthly chart. The 63-day Twiggs Momentum peak below zero [R], however, warns of a primary down-trend. Failure of support at 290 would strengthen the signal.

CRB Commodities Index

* Target calculation: 370 +( 370 – 290 ) = 450

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Aussie Dollar down-trend

Another monthly chart — this time of the Aussie dollar against the greenback. The decline of the last 3 months found support at $0.94 before rallying to a high of $1.04. Breach of the rising trendline indicates that the primary up-trend has ended; confirmed by bearish divergence on 63-day Twiggs Momentum and reversal below zero. Failure of support at $0.94 would signal a decline to $0.84.

AUDUSD

* Target calculation: 0.94 – ( 1.04 – 0.94 ) = 0.84

The daily chart shows consolidation between $1.01 and $1.04 over the last week. Failure of support at $1.01 is likely and would warn of a decline to $0.94. Breakout above $1.04 and the descending trendline is unlikely, but would indicate a rally to the July high of $1.10.

AUDUSD

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Gold heads for $1600

Spot gold is headed for a test of support at $1600/ounce; failure would offer a target of $1500*. In the long term, the primary trend remains up and breakout above $1700 would signal an advance to $1900.

Spot Gold

* Target calculation: 1700 – ( 1900 – 1700 ) = 1500

Amex Gold Bugs index ($HUI) is headed for a test of primary support at 500 on the weekly chart. Failure would signal a primary down-trend with an initial target of 400* — and warn of a similar reversal for spot gold. Declining 63-day Twiggs Momentum slipped below zero to strengthen the bear signal.

Amex Gold Bugs Index

* Target calculation: 500 – ( 600 – 500 ) = 400

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China & HongKong retreat

Dow Jones Shanghai Index fell sharply on Tuesday, signaling a test of the lower trend channel. Declining 63-Day Twiggs Momentum below zero indicates a strong primary down-trend.

Dow Jones Shanghai Index

The Hang Seng Index retreated to 18000 Tuesday. Respect of both resistance at 19000 and the descending trendline warn of another test of primary support at 16000. Declining 13-week Twiggs Money Flow indicates long-term selling pressure. Failure of primary support would offer a target of 13000*.

Hang Seng Index

* Target calculation: 16 – ( 19 – 16 ) = 13

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India & Singapore

The BSE Sensex is testing resistance at 17000. Breakout would signal a bear market rally to test the descending trendline. Rising 13-week Twiggs Money Flow indicates medium-term buying support.

SENSEX

* Target calculation: 16 – ( 17.5 – 16 ) = 14.5

The Singapore Straits Times Index also reflects a bear market rally. Respect of resistance at 2900 would warn of another down-swing — as would a 63-day Twiggs Momentum peak below the zero line.

Straits Times Index

* Target calculation: 2500 – ( 2900 – 2500 ) = 2100

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Crude and commodities rally

Brent Crude rallied off support at $99/$100 per barrel, headed for a test of the upper trend channel. 63-Day Twiggs Momentum above its descending trendline warns that the down-trend is weakening. Breakout above the upper channel would test the 2011 high of $125/barrel.

Brent Crude

CRB Commodities Index similarly rallied off support at 300. 63-Day Twiggs Momentum is still declining and failure to reach the upper trend channel (on the price chart) would warn of an accelerating down-trend.

CRB Commodities Index

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