Shanghai breaks primary support
By Colin Twiggs
December 12th, 2011 4:00 a.m. ET (8:00 p.m. AET)
The Shanghai Composite index broke primary support at 2300 Monday, signaling a decline to 2100*. Follow-through on Tuesday would strengthen the signal. The sharp fall on 13-week Twiggs Money Flow warns of strong selling pressure.
* Target calculation: 2300 - ( 2500 - 2300 ) = 2100
Hong Kong's Hang Seng Index held above 18500 Monday, but another test of medium-term support at 17500 is likely.
Dow Jones Industrial Average is testing resistance at 12300. Breakout would signal a primary advance to 13400 and an end to the bear market. Rising 63-day Twiggs Momentum is encouraging but will only be significant if retracement respects the zero line.
* Target calculation: 12300 + ( 12300 - 11200 ) = 13400
The Nasdaq 100, however, displays a large bearish divergence on 13-week Twiggs Money Flow, warning of selling pressure. Reversal below 2040 would confirm a primary down-trend. Breakout above 2400 is less likely, but would suggest an advance to 2800*.
* Target calculation: 2400 + ( 2400 - 2000 ) = 2800
Never confuse movement with action.
~ Ernest Hemingway