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 Brazilian BOVESPA index is headed for another test of 48000. Reversal of 13-week Twiggs Money Flow below zero warns of further selling pressure. Failure of support would signal a down-swing to 38000*.
* Target calculation: 48 – ( 58 – 48 ) = 38
South Africa’s JSE Overall Index fared better than most but is likely to be dragged lower by the global bear market. Expect a test of support at 28400; failure would signal a decline to 26000*.
* Target calculation: 28.5 – ( 31 – 28.5 ) = 26
The SENSEX is headed for another test of support at 16000. 13-Week Twiggs Money Flow holding below zero indicates a strong primary down-trend. Failure of support is likely and would indicate a down-swing to 14500*.
* Target calculation: 16000 – ( 17500 – 16000 ) = 14500
Singapore’s Straits Times Index has already broken support at 2650, warning of a down-swing to 2300*. 63-Day Momentum declining while below zero also confirms a strong primary down-trend.
* Target calculation: 2600 – ( 2900 – 2600 ) = 2300
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
Transport bellwether Fedex respected resistance at $70, signaling a down-swing to $55*. 13-week Twiggs Money Flow declining below zero indicates a strong primary down-trend. UPS (lime green) is also in a primary down-trend; reversal below its August low would confirm the Fedex bear signal. Declining transport stocks warn of shrinking activity levels in the overall economy.
* Target calculation: 70 – ( 85 – 70 ) = 55
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
Bullish divergence on Japan’s Nikkei 225 index (13-week Twiggs Money Flow) warns of a bear market rally. Breakout above the upper channel of the broadening wedge pattern would confirm. The primary trend, however, remains downward; breakout below the lower channel at 8400 would warn of a down-swing to 7800*.
* Target calculation: 8400 – ( 9000 – 8400 ) = 7800
The Seoul Composite is weaker on Wednesday after a sharp rally earlier in the week. 13-Week Twiggs Money Flow continues to threaten a break below zero. Breakout below the lower border of the broadening wedge formation would signal another primary decline.
* Target calculation: 1650 – ( 1900 – 1650 ) = 1400
Germany’s DAX Index gapped above its secondary trend channel (or large flag) on hopes that the EFSF bailout rumor will materialize. The index is due for a secondary reaction, with bullish divergence on 21-day Twiggs Money Flow indicating medium-term buying pressure. Expect resistance at 6100. The bear market continues, however, and reversal below 5000 would offer a target of 4000*.
* Target calculation: 5000 – ( 6000 – 5000 ) = 4000
The FTSE 100 continues its narrow line between 5000 and 5450, with divergence on 21-day Twiggs Money Flow indicating (medium-term) buying pressure. Again, the bear market is likely to continue and failure of support at 5000 would signal another down-swing — with a target of 4400*.
* Target calculation: 5000 – ( 5600 – 5000 ) = 4400
