Monday Morning Update

By Colin Twiggs
July 24, 2006

In response to a number of requests, we will trial a detailed weekly newsletter on Thursdays and a quick update at the start of the week. Your feedback will be appreciated.

These extracts from my daily trading diary are for educational purposes and should not be interpreted as investment advice. Full terms and conditions can be found at Terms of Use.


USA

The Nasdaq 100 retracement respected the new resistance level at 1520, confirming the primary down-trend. Twiggs Money Flow (21-day) has remained below zero for 3 months, signaling strong long-term distribution.









The Dow Industrial Average respected resistance at 11050 and the 100-day exponential moving average, a bearish sign. Twiggs Money Flow (21-day) holding below the zero line signals distribution. The index is headed for another test of primary support at 10700. A fall below this level would signal reversal to a primary down-trend.









In a similar fashion, the S&P 500 respected resistance at 1260 and appears headed for a test of primary support at 1220. A close below this level would signal reversal of the primary trend. Twiggs Money Flow (21-day) holding below the zero line signals distribution.









Gold

Spot gold has twice tested support at $620. A rally above $645 would complete a double bottom.




Source: Netdania






Currencies

The US Dollar Index weakened over the last few days while gold was also falling. The two never continue in the same direction for long. Expect either gold to rally or the dollar to strengthen.




Source: Netdania


United Kingdom

The FTSE 100 shows a similar pattern to the Dow and S&P 500, and is headed for a test of primary support at 5500.





Japan

The Nikkei 225 is in a primary down-trend, having respected the 100-day exponential moving average from below. The index bounced at support at 14400, but the overall pattern is negative. A close below 14000 would confirm the down-trend.









ASX Australia

The All Ordinaries is following other markets down, having respected resistance at 4960. Expect a test of primary support at 4800.










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