Tag: Twiggs Money Flow

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Asia rallies

Asia rallied Monday on encouraging signs from Europe, with the Nikkei 225 testing 8300, the Seoul Composite (KOSPI) jumping to 1815, and Hang Seng above 18000. But a look at the quarterly chart of the Nikkei shows a long-term, bearish divergence on 63-day Twiggs Momentum, while the index is headed for a test of key support at 7000/7500. Unless we see a break above the descending trendline, the trend remains downward.

Nikkei 225 Index

South Korea’s Seoul Composite index is headed for another test of 1650 according to the weekly chart. 63-Day Twiggs Momentum oscillating well below zero indicates a strong primary down-trend. Failure of support would offer a target of 1350*.

KOSPI Index

* Target calculation: 1650 – ( 1950 – 1650 ) = 1350

Hong Kong’s Hang Seng index recovered above 18000 Monday but the long-term trend remains downward. Steeply descending 63-day Twiggs Momentum warns of a strong primary down-trend.

Hang Seng Index

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

The Shanghai Composite index did not share the enthusiasm of other Asian markets, testing support at 2375.  Reversal of 13-week Twiggs Money Flow below zero warns of rising selling pressure. Failure of support at 2300 would offer a target of 2050*.

Shanghai Composite Index

* Target calculation: 2300 – ( 2550 – 2300 ) = 2050

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India warns of primary decline, Singapore may follow

India’s SENSEX broke through support at 15800/16000, signaling a primary decline to 14000*. Reversal of 13-week Twiggs Money Flow below zero confirms strong selling pressure. The index later recovered above 16000 Monday; we will have to wait to see whether the new support level holds.

BSE SENSEX Index

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

The monthly chart shows Singapore’s Straits Times Index headed for a test of primary support at 2500. Long-term bearish divergence on 63-day Twiggs Momentum indicates a primary down-trend. Failure of support would signal a primary decline to 2100*.

Straits Times Index

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

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Australia rallies

The ASX 200 rallied off support at 4000, headed for a test of medium-term resistance at 4150 — and the descending trendline. 21-Day Twiggs Money Flow remains below zero and respect of the zero line would warn of strong medium-term selling pressure. In the longer term, breach of primary support at 3850 would signal a primary decline to 3350*.

ASX 200 Index

* Target calculation: 3850 – ( 4350 – 3850 ) = 3350

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Europe weakens

A monthly chart of Dow Jones Europe shows the index testing primary support at 210. A peak below zero on 63-day Twiggs Momentum indicates a strong primary down-trend. Failure of support would offer a medium-term target of 160*.

Dow Jones Europe Index

* Target calculation: 210 – ( 260 – 210 ) = 160

Italy’s MIB Index is headed for another test of primary support at 13000 on the weekly chart. Respect of the descending trendline suggests another primary decline. Reversal of 13-week Twiggs Money Flow below zero would also warn of rising selling pressure. And breach of primary support would signal a decline to 9000*.

Italian MIB Index

* Target calculation: 13 – ( 17 – 13 ) = 9

The UK’s FTSE 100 index is also headed for a test of primary support at 4800. 63-Day Twiggs Momentum peaking below zero indicates a strong primary down-trend. Failure of primary support would offer a target of 4000*.

FTSE 100 Index

* Target calculation: 4800 – ( 5600 – 4800 ) = 4000

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S&P 500 breaks 1200

The S&P 500 index broke medium-term support at 1200 and is headed for a test of the primary level at 1100. Failure would offer a target of 900*. The 63-day Twiggs Momentum peak below zero warns of a primary down-trend.

S&P 500 Index

* Target calculation: 1100 – ( 1300 – 1100 ) = 900

NASDAQ 100 index is similarly headed for the band of primary support between 2000 and 2050. Bearish divergence on 13-week Twiggs Money Flow warns of strong selling pressure. failure of support would signal a primary decline to 1600*.

Nasdaq 100 Index

* Target calculation: 2000 – ( 2400 – 2000 ) = 1600

Dow Jones Industrial Average monthly chart shows the index testing medium-term support at 11000. The 63-day Twiggs Momentum peak below zero again warns of a primary down-trend. Breach of support would test the primary level at 10400; and failure of that level would remove any doubt regarding a bear market.

Dow Jones Industrial Average

* Target calculation: 10400 – ( 12300 – 10400 ) = 8500

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Bovespa disappoints

Brazil’s Bovespa index disappointed after promising a breakout above 60000. The index failed to break through resistance, instead falling through support at 58000 to warn of another test of 48000. Rising 63-day Twiggs Momentum and Twiggs Money Flow, however, continue to indicate that the index is forming a bottom.

Bovespa Index

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China and Hong Kong

Hong Kong’s Hang Seng Index is testing medium-term support at 18000; breach would signal another test of 16000*. 13-Week Twiggs Money Flow below zero warns of rising selling pressure.

Hang Seng Index

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

The Shanghai Composite is testing medium-term support at 2400. Failure of primary support at 2300 would offer a medium-term target of 2000*. The long-term trend is edging lower in a controlled descent, so conventional target calculations do not apply. Recovery above 2600 is less likely, but would signal another test of the descending trendline.

Shanghai Composite Index

* Target calculation: 2300 – ( 2600 − 2300 ) = 2000

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Japan & South Korea

DJ South Korea Index is testing medium-term support at 390 Monday. Failure would signal a test of the primary level at 350. 63-Day Twiggs Momentum holding below zero suggests continuation of the primary down-trend.

Dow Jones South Korea Index

* Target calculation: 350 – ( 420 − 350 ) = 280

The weekly chart of Japan’s Nikkei 225 shows respect of resistance at 9000. Failure of primary support at 8400 would offer a target of 7800*. 13-Week Twiggs Money Flow below zero warns of rising selling pressure.

Nikkei 225 Index

* Target calculation: 8400 – ( 9000 − 8400 ) = 7800

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ASX 200 threatens support

The ASX 200 index is testing medium-term support at 4150. Bearish divergence on 21-day Twiggs Money Flow warns of selling pressure. Failure of support would test the primary level at 3850.

ASX 200 Index

* Target calculation: 3900 – ( 4300 − 3900 ) = 3500

A weekly chart of the All Ords shows a primary down-trend. Failure of support at 4200 would test 3900. Completion of a peak below zero on 63-day Twiggs Momentum would suggest another decline.

All Ordinaries Index Weekly Chart

* Target calculation: 4000 – ( 4500 − 4000 ) = 3500

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India & Singapore

The BSE Sensex is headed for a test of primary support at 16000/15800. Reversal of 13-week Twiggs Money Flow below zero warns of further selling pressure. Failure of primary support would offer a target of 14000*.

BSE Sensex Index

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

Westpac’s monthly Fearful Symmetry chronicle on the Indian economy makes an interesting point:

“The reality is that while India is an internally focused and investment-led economy — thus producing a low-beta response to swings in global growth — the financing of investment, at the margin, must come from abroad, so it is highly vulnerable to downswings that incorporate or are driven by negative financial shocks. Put simply, in India a slowdown in the global economy is felt principally through the hardening of its external financing constraint. That is in contrast to the majority of its East Asian (surplus) neighbours, where global shocks are primarily transmitted via an export-led deceleration in aggregate demand, or its non-China BRIC peers, where swings in commodity prices are the key variable.”

Given that almost half of foreign bank funding is sourced from Europe, expect a significant tightening of external finance and hence domestic investment.

Singapore’s Straits Times Index is headed for medium-term support at 2700. Failure of 2700 would indicate a test of primary support at 2500. Reversal of 63-day Twiggs Momentum deep below zero warns of a strong primary down-trend.

Straits Times Index

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

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