By Colin Twiggs
March 2nd, 2011 1:30 a.m. ET (5:30 p:m AEDT)
Gold broke through resistance at $1420, signaling an advance to $1520*. The metal is now retracing to test the new support level; respect would confirm the signal. A Twiggs Momentum (21-day) trough above zero would add further confirmation.
* Target calculation: 1420 + ( 1420 - 1320 ) = 1520
The S&P 500 index is testing support at 1300; failure would warn of a correction.
The Dollar Index is testing medium-term support at 77 and failure would threaten primary support at 76. Breach of primary support would offer a target of 71*. Recovery above 79, however, would complete a double bottom and suggest a rally to 81.
* Target calculation: 76 - ( 81 - 76 ) = 71
Silver continues its strong rally: a bullish sign for gold.
* Target calculation: 31 + ( 31 - 27 ) = 35
Nymex WTI crude is testing the psychological barrier of $100/barrel and, with the ongoing turmoil in Libya, is likely to shortly reach its target of $105.
* Target calculation: 85 + ( 85 - 65 ) = 105
The CRB Commodities Index continues its strong up-trend, suggesting an upward breakout and fresh advance for the Australian dollar.
The euro is testing medium-term resistance at $1.3850. Breakout is more likely and would test $1.42, but reversal below $1.37 would warn of another test of $1.3450. A Twiggs Momentum trough above zero would confirm a strong up-trend.
The pound is testing resistance at $1.62, but bearish divergence on Twiggs Money Flow warns of selling pressure. Breakout above $1.62 would test the 2009 high of $1.70*, while respect would indicate another test of the long-term trendline.
* Target calculation: 1.62 + ( 1.62 - 1.53 ) = 1.71
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The yen continues to range between ¥80 and ¥84 against the dollar. Twiggs Momentum oscillating around the zero line indicates uncertainty; decline below -2% would warn of another down-swing. Breach of support at ¥80 would signal a fall to ¥76*, while breakout above ¥84 would indicate a primary advance to ¥88*.
* Target calculation: 84 + ( 84 - 80 ) = 88; 80 - ( 84 - 80 ) = 76;
The Aussie dollar is headed for another test of medium-term support at $1.00 against the greenback. Bearish divergence on Twiggs Money Flow warns of further profit-taking, but rising commodity prices suggest that the primary up-trend will continue. Breakout above $1.02 would offer a target of $1.08*.
* Target calculation: 1.02 + ( 1.02 - 0.96 ) = 1.08
If one has no affection for a person or a system, one should feel free to give the fullest expression to his disaffection so long as he does not contemplate, promote, or incite violence.
~ Gandhi during his trial for "exciting disaffection toward His Majesty's Government" (18 March 1922)