Japan Signals Down-Trend
By Colin Twiggs
November 23, 3:00 a.m. ET (7:00 p.m. AET)
The Dow Industrial Average and S&P 500 warn of rising selling pressure. Asia-Pacific markets, however, are a mixed bag: China and India remain positive, Australia and Korea are more tentative, while Japan commenced a primary down-trend.
The Shanghai Composite Index is headed for a test of resistance at 3500; breakout would offer a target of 4300*. Rising Twiggs Money Flow (13-week) confirms buyer interest. Reversal below the rising trendline would warn of another test of 3000.
* Target calculations: 3500 + ( 3500 - 2700 ) = 4300
The Hang Seng Index continues to display a rising wedge, warning of reversal back to its base at 19500. Twiggs Money Flow (21-day) holding above zero, however, indicates buying support. Breakout above the upper border would offer a target of 25000*.
* Target calculation: 23000 + ( 23000 - 21000 ) = 25000
The Sensex is headed for a test of resistance at 17500. Respect of resistance would signal a test of 15500, while breakout would offer a target of 20000*. Rising Twiggs Money Flow (13-week & 21-day) confirms buyer interest.
* Target calculation: 17500 + ( 17500 - 15000 ) = 20000
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The Nikkei 225 broke through support at 9600, signaling a primary down-trend. Declining Twiggs Money Flow (13-week) confirms selling pressure. Expect retracement to test the new resistance level at 9600, followed by a test of support at 9000. The Nikkei is closed Monday for Labor Thanksgiving Day.
* Target calculation: 10600 + ( 10600 - 9600 ) = 11600
The Seoul Composite recovered above resistance at 1600, indicating a weak correction. The index consolidated in a narrow band on Monday, indicating buyer interest. Twiggs Money Flow (21-day) recovery above zero would confirm.
The All Ordinaries is consolidating in a narrow band, between 4700 and 4800, indicating continuation of the rally. Target for a breakout would be 5000*, close to the upper border of the broadening wedge consolidation. Reversal below 4700, however, would warn of a secondary correction. Twiggs Money Flow (21-day) recovery above zero would confirm buying pressure.
* Target calculation: 4700 + ( 4800 - 4500 ) = 5000
The ASX 200 also displays a broadening wedge; breakout above 4800 would test the upper border. Declining Twiggs Money Flow (13-week), however, continues to signal selling pressure.
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