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Dow and gold rise as dollar falls

By Colin Twiggs
April 28th, 2011 6:00 a.m. ET (8:00 p:m AET)

These extracts from my trading diary are for educational purposes and should not be interpreted as investment or trading advice. Full terms and conditions can be found at Terms of Use.



Stocks

The Dow broke through resistance at 12400, signaling an advance to 13200. Retracement that respects the new support level would strengthen the signal. Twiggs Money Flow (13-week) up-turn high above zero indicates strong buying pressure.

Dow Jones Industrial Average

* Target calculation: 12400 + ( 12400 - 11600 ) = 13200

The DJ China Broad index reversed below medium-term support at 360, warning of a correction. A similar break below 2850 on the Shanghai Composite Index would confirm. Reversal of 13-week Twiggs Money Flow below zero would signal selling pressure.

Dow Jones China Broad Index

The ASX All Ordinaries Index is weighed down by China and rising consumer prices in Australia. Reversal below 4850 would test primary support at 4600.

ASX All Ordinaries Index

Gold

Gold benefited from the falling dollar, headed for its medium-term target of 1550*. Rising Twiggs Momentum (21-day) indicates a healthy up-trend.

Spot Gold

* Target calculation: 1430 + ( 1430 - 1310 ) = 1550

Twiggs Money Flow (13-week) on GLD confirms strong buying pressure.

Spot Gold GLD

Silver

Silver is testing resistance at $50. The strong rise on Twiggs Momentum indicates trend strength, but the accelerating up-trend warns of a blow-off.

Silver

US Dollar Index

The Dollar index broke through its 2009 low of 74 and is headed for a test of support at 71*.

US Dollar Index

* Target calculation: 76 - ( 81 - 76 ) = 71

Crude Oil

Nymex WTI crude respected medium-term support at $106/barrel, indicating a strong trend, but the accelerating up-trend warns of a blow-off.

Crude Oil

* Target calculation: 106 + ( 106 - 96 ) = 116

Commodities

The CRB Commodities Index is testing resistance at 370. Breakout would signal a test of the upper trend channel, while reversal below the lower trend channel would warn that the trend is losing momentum. The Australian Dollar is playing catch-up with commodity prices since breaking through resistance.

CRB Commodities Index

Euro

The euro is headed for a test of resistance at $1.50. Respect would indicate a test of support at $1.42, while breakout would signal another primary advance.

Euro US Dollar

* Target calculation: 1.40 + ( 1.40 - 1.30 ) = 1.50

UK Pound Sterling

The pound broke through resistance at $1.64, signaling an advance to the 2009 high at $1.70*. Completion of a Twiggs Momentum trough above zero confirms trend strength.

Pound Sterling

* Target calculation: 1.63 + ( 1.63 - 1.53 ) = 1.73

Japanese Yen

The dollar continues downwards, headed for medium-term support at ¥80. Respect of support would indicate that the BOJ has succeeded in its attempt to protect exporters from the strengthening yen.

US Dollar Yen

New Zealand Dollar

The Australian dollar recovered above long-term resistance at its 2000 high of $1.35 against its kiwi counterpart. Breakout above $1.375 would confirm another primary advance — as would retracement that respects the new support level at $1.35.

Australian Dollar NZ Dollar

Australian Dollar

The Aussie dollar broke through its immediate target of $1.08* against the greenback. The rally is becoming extended and penetration of the rising trendline would warn of a correction.

Australian Dollar US Dollar


Fish should not be taken away from water. And sharp weapons of state should not be displayed to the people.

~ Lao Tzu: Tao Te Ching

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