Dow Hesitant, Nikkei Marches On
By Colin Twiggs
June 30, 2007 4:00 a.m. EST (6:00 p.m. AEST)
The Dow Jones Industrial Average is consolidating at the upper border of its 3-year trend channel while Twiggs Money Flow fell to below zero, signaling distribution.
Long Term: The primary trend is up, with support at 12000 and 12800.
Short Term: Downward breakout below 13250 would warn of a secondary correction. On the other hand, a rise above 13700 would signal another primary advance - which could accelerate into a blow-off.
Both UPS and Fedex are edging upwards, but the Dow Jones Transportation Average is retreating toward another test of support at 5000. Twiggs Money Flow signals distribution and a (DJTA) close below 5000 would signal weakness.
The Nasdaq Composite is consolidating in an ascending
broadening wedge; a failed up-swing would warn of a downward
breakout and secondary correction.
Long Term: The primary trend remains upwards, with support at 2340 and 2500 (from 2525).
The S&P 500 shows similar consolidation to the Dow,
Twiggs Money Flow (21-day) signaling distribution. Breakout
below 1490 would warn of a secondary correction; while a rise
above 1540, though unlikely in the present circumstances, would
signal a further primary advance.
Long Term: The primary trend remains up, with support levels at 1460 and 1375.
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The FTSE 100 appears stronger than US markets, rallying
off the lower border of an ascending broadening wedge, while
Twiggs Money Flow is recovering. Expect a swing to test the
upper border of the formation. Breakout from the wedge, or a
failed swing, will indicate future direction.
Long Term: The primary up-trend continues, with support at 6000 and 6450.
The Nikkei 225 is testing resistance at the February
2007 high of 18215, while
Twiggs Money Flow signals accumulation. The medium-term
target for an upward breakout is 19800
Long Term: The primary trend remains up, with primary support at 16600. The long-term target is 21000 (17500+[17500-14000]).
The Hang Seng is consolidating below resistance at 22000, while Twiggs Money Flow signals short-term distribution. The calculated target for an upward breakout is 23300 (21000+[21000-18700]). Downward breakout is less likely and would signal a test of the new support level at 21000; reversal below 21000 is not expected.
The All Ordinaries is consolidating at the upper border
of the trend channel. Downward breakout would warn of a
secondary correction, while upward breakout would signal a
further primary advance.
Twiggs Money Flow (21-day) displays a short-term bull, but
long-term bear signal.
Long Term: The primary trend remains up, with support at 5650 and 6000.
Short Term: The index continues in a broadening top formation. Look for a failed swing or breakout to indicate future direction. Respect of 6200 would be a bullish sign. Large volume on Friday is most likely attributable to profit-taking (or loss-taking) at the tax year-end, so we should not read too much into this.
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