Fed patience buoys stocks
By Colin Twiggs
March 19th, 2015 6:00 p.m. AEDT (3:00 a.m. EDT)
Advice herein is provided for the general information of readers and does not have regard to any particular person's investment objectives, financial situation or needs. Accordingly, no reader should act on the basis of any information contained herein without first having consulted a suitably qualified financial advisor.
The S&P 500 rallied to 2100 on the strength of the Fed's latest FOMC statement, allaying fears of an imminent rate rise. Follow-through above 2120 would indicate a test of 2200*. Another 13-week Twiggs Money Flow trough above zero would signal continuation of the primary up-trend.
* Target calculation: 2100 + ( 2100 - 2000 ) = 2200
CBOE Volatility Index at 14 indicates low risk typical of a bull market.
Germany's DAX retreated below its long-term target at 12000*. Correction to 11000 would indicate a healthy up-trend, while narrow consolidation below 12000 would be a bullish sign. Rising 13-week Twiggs Money Flow indicates strong buying pressure.
* Target calculation: 11000 + ( 11000 - 10000 ) = 12000
The Footsie rallied to 6950. The short correction is a bullish sign, suggesting a fresh advance. 13-Week Twiggs Money Flow oscillating above zero indicates healthy buying pressure. Breakout above 7000 would signal a primary advance with a long-term target of 8000*.
* Target calculation: 7000 + ( 7000 - 6000 ) = 8000
China's Shanghai Composite Index broke resistance at 3400, signaling a fresh advance. Economic data is not strong, but expectation of further stimulus has buoyed the market. A 13-week Twiggs Money Flow rally indicates medium-term buying pressure. Reversal below 3050 is now unlikely.
* Target calculation: 3400 + ( 3400 - 2400 ) = 4400
Japan's Nikkei 225 Index is heading for a test of its long-term target at 20000*. Rising 13-week Twiggs Momentum indicates a strong (primary) up-trend.
* Target calculation: 18000 + ( 18000 - 16000 ) = 20000
India's Sensex faces stiff resistance at 30000. Declining 13-week Twiggs Momentum warns the primary-trend is weakening. Recovery above 29000 would indicate the correction is over, while breach of 28000 would test primary support at 26500/27000. Respect of the primary trendline would establish a solid base for further advances.
The ASX 200 rallied to 5950, the short correction suggesting another advance. Breakout above 6000 would confirm, offering a (medium-term) target of 6250*. Rising 13-week Twiggs Money Flow indicates buying pressure. Reversal below 5750 is unlikely, but would warn of a correction to 5500.
* Target calculation: 6000 + ( 6000 - 5750 ) = 6250
Concessions to adversaries only end in self reproach, and the more strictly they are avoided the greater will be the chance of security.
~ Thucydides (c. 460 BC - c. 400 BC): History of the Peloponnesian War
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