Asian Markets Reflect Selling Pressure
By Colin Twiggs
November 2, 3:00 a.m. ET (6:00 p.m. AET)
The Dow shows signs of rising selling pressure, echoed in major North American and European markets. Asia-Pacific markets opened sharply lower on Monday, with only the Shanghai Composite recouping early losses. Expect further weakness (Monday) in Europe and North American markets. An FTSE 100 fall below 5000 and Dow below 9500 would confirm the secondary correction.
The Shanghai Composite Index gapped down at the open, but rallied to test resistance at 3050 by early afternoon.
Source: Yahoo Finance
Bearish divergence on Twiggs Money Flow (21-day) warns of continued selling pressure. Reversal below 3000 would indicate another test of primary support at 2700. Breakout above 3100 would signal an advance to 3500.
The Hang Seng Index continues to test the rising trendline. Twiggs Money Flow (21-day) holding above zero indicates buying support: expect the primary up-trend to continue. Recovery above resistance at 22000 would signal a primary advance with a target of 23500*. Reversal below the rising trendline is unlikely, but would warn that the up-trend is weakening.
* Target calculation: 22000 + ( 22000 - 20500 ) = 23500
The Sensex is undergoing a secondary correction, the sharp fall on Twiggs Money Flow (21-day) indicating strong selling pressure. Expect a test of 15000.
The Nikkei 225 fell as low as 9743 early Monday before recovering to 9800 by mid-afternoon. Declining Twiggs Money Flow (13-week) indicates selling pressure. Failure of support at 9600 would signal a primary down-trend.
* Target calculation: 10600 + ( 10600 - 9600 ) = 11600
The Seoul Composite is undergoing a secondary correction, testing support at 1550 early Monday afternoon. Bearish divergence on Twiggs Money Flow (21-day) confirms selling pressure. Expect a test of support at 1450.
The All Ordinaries reversed below 4600, confirming a secondary correction. Bearish divergence on Twiggs Money Flow (21-day) warns of strong selling pressure. Initial target for a correction is the Fibonacci 50% retracement level at 4300*, but primary support is a lot lower: at 3700.
* Target calculation: 4900 - ( 4900 - 3700 ) = 4300
The ASX 200 also signals a correction, with a break below 4600. Twiggs Money Flow (13-week) retreat below 20% would indicate rising selling pressure.
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