By Colin Twiggs
July 25th, 2011 8:00 a.m. ET (10:00 p.m. AET)
Not much to get excited about. The Nasdaq 100 and Nikkei 225 broke resistance to signal fresh advances, and India may be forming a bottom, but China threatens to join Brazil and Australia in a primary down-trend.
The Dow Jones Global Index is headed for another test of resistance at 268. Breakout would signal an advance to 280*. Rising 21-day Twiggs Money Flow indicates medium-term buying pressure. Reversal below the band of support at 250 is unlikely at present, but would signal a primary down-trend.
* Target calculation: 268 + ( 268 - 256 ) = 280
The Dow Industrial Average is likewise testing resistance at 12750. Breakout would offer a short-term target of 13100*. Twiggs Money Flow formed a trough above the zero line, indicating medium-term buying pressure; reversal below zero, however, would reinforce the long-term bearish divergence.
* Target calculation: 12750 + ( 12750 - 12400 ) = 13100
The weekly chart of the S&P 500 is testing resistance at 1350. Recovery of 13-week Twiggs Money Flow above its descending trendline indicates medium-term buying support. Breakout above 1350 would offer a medium-term target of 1450*. Primary support remains at 1250.
* Target calculation: 1350 + ( 1350 - 1250 ) = 1450
Bellwether transport stocks Fedex and UPS continue their long-term consolidation, reflecting stagnant economic activity levels. Twiggs Money Flow oscillating around zero shows no clear trend.
The Nasdaq 100 broke resistance at 2425 on the weekly chart, offering a short-term target of 2500 and medium-term at 2600*. Recovery of 13-week Twiggs Money Flow above the descending trendline would strengthen the breakout signal.
* Target calculation: 2400 + ( 2400 - 2200 ) = 2600
The TSX Composite Index is testing resistance at 13500 and the descending trendline. Breakout would indicate that the down-trend is losing momentum, offering a short-term target of 13900. Rising 21-day Twiggs Money Flow indicates medium-term selling pressure. Reversal below 13100 is unlikely, but would test primary support at 12750.
* Target calculation: 12750 - ( 13500 - 12750 ) = 12000
The FTSE 100 opened slightly lower Monday after weak performance from Asia, but rising 21-day Twiggs Money Flow indicates buying support and another test of 6000/6100 is likely. Breach of support at 5600/5650 is unlikely at present, but would warn of a primary down-trend.
* Target calculation: 6100 + ( 6100 - 5700 ) = 6500 or 5600 - ( 6100 - 5600 ) = 5100
The DAX is headed for another test of resistance at 7500, supported by rising 21-day Twiggs Money Flow. Breakout would offer a target of 8000*. Reversal below 7000 is unlikely at present, but would warn of a primary down-trend.
* Target calculation: 7500 + ( 7500 - 7000 ) = 8000
The CAC-40 found support at 3700, but 13-week Twiggs Money Flow below zero continues to warn of a reversal. Breach of support at 3700 would confirm.
* Target calculation: 3700 - ( 4100 - 3700 ) = 3300
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The Sensex re-tested resistance at 19000 Monday on the weekly chart. 13-Week Twiggs Money Flow remains below zero, however, and failure of short-term support at 18400 would warn of another test of primary support at 17500. Breakout above 19000 accompanied by a Twiggs Money Flow rise above zero, on the other hand, would offer a target of 20000.
The Straits Times Index consolidated between 3150 and 3170 Monday, below the band of resistance at 3180 to 3200. Breakout above 3200 would signal a primary advance to 3400*. Respect of resistance at 3180 would re-test the rising trendline at 3100.
* Target: 3200 + ( 3200 - 3000 ) = 3400
The Nikkei 225 retraced Monday for a re-test of the new support level at 10000. Rising 21-day Twiggs Money Flow indicates buying pressure. Respect of support would confirm an advance to the February high of 10800.
* Target calculation: 10000 + ( 10000 - 9300 ) = 10700
The Seoul Composite Index consolidated Monday below resistance at 2180. Breakout would indicate an advance to 2400*. Reversal below 2100 is unlikely, but would re-test primary support at 2000. Buying pressure is weakening but remains positive according to 13-week Twiggs Money Flow.
* Target calculation: 2200 + ( 2200 - 2000 ) = 2400
The Dow Jones Taiwan Index continues to warn of reversal to a primary down-trend, with breach of the declining trendline and bearish divergence on 13-week Twiggs Money Flow. Failure of support at 200 would test primary support at 196.
* Target calculation: 196 - ( 216 - 196 ) = 176
The Shanghai Composite Index tested the primary support level of 2680 Monday. Failure of support would warn of a primary down-trend — confirmed if support at 2620 is breached. 63-Day Twiggs Momentum holding below zero strengthens the bear signal.
* Target calculations: 2700 - ( 3000 - 2700 ) = 2400
The Hang Seng Index is also testing its primary support level. Reversal below 22200 would warn of a primary down-trend. Breach of 21500 would confirm, offering a target of 20000*. Twiggs Money Flow below zero continues to warn of selling pressure.
* Target calculation: 22200 - ( 24400 - 22200 ) = 20000
The Bovespa Index remains in a strong primary down-trend. Respect of resistance at 61000 would signal a test of the May low at 58000*. 13-Week Twiggs Money Flow below zero indicates strong selling pressure.
* Target calculation: 61000 - ( 64000 - 61000 ) = 58000
The JSE Overall Index continues in a long-term consolidation. 13-Week Twiggs Money Flow is weakening and a failed swing, that does not reach 33000, would strengthen the bear signal.
* Target calculation: 33000 + ( 33000 - 30000 ) = 36000
The NZ50 penetrated its declining trendline, but then retreated Monday to 3430. Failure of support at 3380 would test primary support at 3300. The sharp fall on 13-week Twiggs Money Flow continues to warn of a primary reversal.
* Target calculation: 3425 + ( 3425 - 3300 ) = 3550
The All Ordinaries is again testing primary support at 4600. Breach would again warn of a primary down-trend. Follow-through below 4500 would confirm. The slight rise on 21-day Twiggs Money Flow indicates short-term buying support, but the big picture is bearish.
* Target calculation: 4600 - ( 5000 - 4600 ) = 4200
The ASX 200 is similarly testing support at 4500. Follow-through below 4450 would confirm the primary down-trend. 63-Day Twiggs Momentum holding below zero strengthens the bear signal.
* Target calculation: 4500 - ( 5000 - 4500 ) = 4000
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