{"id":13802,"date":"2016-02-18T09:35:18","date_gmt":"2016-02-18T09:35:18","guid":{"rendered":"http:\/\/researchandinvestment.com\/?p=1308"},"modified":"2016-02-18T09:35:18","modified_gmt":"2016-02-18T09:35:18","slug":"one-swallow-does-not-a-summer-make","status":"publish","type":"post","link":"https:\/\/thepatientinvestor.com\/index.php\/2016\/02\/18\/one-swallow-does-not-a-summer-make\/","title":{"rendered":"One swallow does not a summer make"},"content":{"rendered":"
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“One swallow does not a summer make, nor one fine day; similarly one day or brief time of happiness does not make a person entirely happy.”<\/p>\n

~ Aristotle (384 BC – 322 BC)<\/p>\n<\/blockquote>\n

Similarly, one brief rally does not make a bull market.<\/p>\n

Dow Jones Global Index found support at 270 and is rallying to test resistance at the former primary support level of 290. 13-Week Twiggs Momentum peaks below zero flag a strong primary down-trend. Breach of 270 would confirm another decline. Recovery above 290, on the other hand, would indicate a more gradual down-trend rather than a reversal; respect of the descending trendline at 300 would confirm.<\/p>\n

\"Dow<\/p>\n

* Target calculation: 290 – ( 320 – 290 ) = 260<\/p>\n

Dow Jones Industrial Average recovered above primary support at 16000, long tails on weekly candles reflected committed buying. Rising 13-week Twiggs Money Flow indicates medium-term buying pressure. Breakout above 16500 would signal a test of 17000. But respect of 17000 is likely and would warn of continuation of the primary down-trend. Breach of 16000 would confirm the signal, offering a target of 14000*.<\/p>\n

\"Dow<\/p>\n

* Target calculation: 16000 – ( 18000 – 16000 ) = 14000<\/p>\n

The S&P 500 is similarly headed for a test of 1950. Rising 13-week Twiggs Money Flow again reflects medium-term buying pressure. Reversal of the primary trend is unlikely and breach of support at 1850 would confirm a decline to 1700*.<\/p>\n

\"S&P<\/p>\n

* Target calculation: 1900 – ( 2100 – 1900 ) = 1700<\/p>\n

CBOE Volatility Index (VIX) is headed for another test of support at 20. Respect is likely and would confirm that risk remains elevated.<\/p>\n

\"S&P<\/p>\n

Canada’s TSX 60 broke resistance at 750. Rising 13-week Twiggs Momentum suggests that a bottom may be forming, but only another test of 700 would confirm this.<\/p>\n

\"TSX<\/p>\n

* Target calculation: 700 – ( 750 – 700 ) = 650<\/p>\n

Transport<\/h2>\n

Bellwether transport stock Fedex (FDX) found support at $120. Recovery above $140 would signal a test of $150 and the descending trendline. But the primary down-trend remains intact.<\/p>\n

\"Fedex\"<\/p>\n

Europe<\/h2>\n

Germany’s DAX is testing resistance at 9500. The rally may well follow-through to 10000 but buying pressure on 13-week Twiggs Momentum appears secondary and the primary down-trend is intact.<\/p>\n

\"DAX\"<\/p>\n

* Target calculation: 9500 – ( 11500 – 9500 ) = 7500<\/p>\n

Deutsche Post AG (DPW.DE), Europe’s bellwether equivalent of Fedex, found support at € 20. A rally that respects resistance at € 23 would confirm a strong primary down-trend, while respect of € 25 and the descending trendline would indicate a more gradual decline. 13-Week Twiggs Money Flow declining below zero signals long-term selling pressure.<\/p>\n

\"Deutsche<\/p>\n

The Footsie recovered to 6000, but expect strong resistance at this level (and the declining trendline). 13-Week Twiggs Momentum oscillating below zero flags a primary down-trend. Long-term target for a decline remains 5000*.<\/p>\n

\"FTSE<\/p>\n

* Target calculation: 6000 – ( 7000 – 6000 ) = 5000<\/p>\n

Asia<\/h2>\n

The Shanghai Composite Index found support at 2700. Expect a test of resistance at 3000, but the primary trend is clearly down and likely to remain so for some time.<\/p>\n

\"Shanghai<\/p>\n

* Target calculation: 3000 – ( 3600 – 3000 ) = 2400<\/p>\n

Japan’s Nikkei 225 Index is retracing to test the new resistance level after breaking primary support at 17000. Respect is likely and would confirm the primary down-trend. Decline of 13-week Twiggs Money Flow below zero strengthens the bear signal.<\/p>\n

\"Nikkei<\/p>\n

* Target calculation: 17 – ( 20 – 17 ) = 14<\/p>\n

India’s Sensex broke the bottom border of its trend channel, testing support at 23000. The primary down-trend is accelerating. Respect of resistance at 24000 is likely and would warn of a test of 22000. Respect of resistance at 25000, on the other hand, would suggest a more gradual descent.<\/p>\n

\"SENSEX\"<\/p>\n

* Target calculation: 25000 – ( 27500 – 25000 ) = 22500<\/p>\n

Australia<\/h2>\n

The ASX 200 retraced to test resistance at 5000 and the descending trendline. Respect of the latter is likely and would confirm the primary down-trend. Bullish divergence on 13-week Twiggs Money Flow indicates medium-term (secondary) buying pressure. The weight of the market remains on the sell (bear) side. Respect would indicate a test of support at 4600, but the long-term target remains 4000*.<\/p>\n

\"ASX<\/p>\n

* Target calculation: 4850 – ( 5050 – 4850 ) = 4650; 5000 – ( 6000 – 5000 ) = 4000<\/p>\n

Banks are taking a hammering, with the Finance sector ($XFJ) in a clear down-trend. Retracement to test resistance at 5700 is secondary. A rally that respects the descending trendline would suggest a decline to 5100*. Declining 13-week Twiggs Money Flow reflects long-term selling pressure.<\/p>\n

\"ASX<\/p>\n

* Target calculation: 5400 – ( 5700 – 5400 ) = 5100<\/p>\n

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