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Monday Update

By Colin Twiggs
July 31, 2006

We are trialing a quick update at the start of the week and a detailed weekly newsletter on Thursdays. I am doing a fair amount of traveling so delivery times may vary. 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 is again testing resistance at 1520. A close above this level would indicate that the recent trend reversal is likely to resolve into a bear trap, while a close below Thursday's low of 1480 would be a bear signal -- and a break below 1450 would confirm 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 is headed for a test of resistance at 11300. A close above this level would signal a test of resistance at 11650 while reversal would mean another test of primary support at 10700.









The S&P 500 made a bullish breakout from the recent symmetrical triangle (highlighted with dark blue lines). A close above 1290 would confirm the end of the secondary correction and signal a test of the May high of 1325. However, Twiggs Money Flow (21-day) holding below the zero line continues to signal distribution.









Gold

Spot gold is headed for another test of resistance at $680. A breakout above this level would signal a rally to test the May high of $725. Failure to penetrate resistance, however, would mean another test of $620..








Currencies

The US Dollar Index is headed for a test of intermediate support at 84.75. Failure of this level would test primary support at 83.50. If the level holds, that would mean another test of resistance at 87.00.




Source: Netdania


United Kingdom

The FTSE 100 is rallying after a higher low (mid-July) and a new high. Expect a test of resistance at the recent high of 6130. Twiggs Money Flow (21-day) is trending upwards, signaling accumulation.





Japan

The Nikkei 225 is headed for another test of resistance at 15500. The recent higher low is a bullish sign and a breakout above 15500 would signal reversal of the primary down-trend. However, if the index respects the 100-day exponential moving average from below, that would confirm the down-trend. Twiggs Money Flow (21-day) is completed a higher low: a positive sign. 









ASX Australia

The All Ordinaries is consolidating between 4880 and 4980. A close above the rectangle would signal a test of 5100, while a close below would mean a test of primary support at 4800. Breakout above 5100 would signal the start of an up-trend.







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The weekly Trading Diary offers fundamental analysis of the
economy and technical analysis of major market indices,
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