TSX bull signal
By Colin Twiggs
April 16th, 2015 5:00 p.m. AET (1:00 a.m. EDT)
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Canada's TSX 60 index has followed the Footsie bull signal of last week, breaking long-term resistance at 900 to signal a fresh advance and long-term target of 1000*. A 13-week Twiggs Momentum trough above zero strengthens the signal. Expect retracement to test the new support level, but respect is likely.
* Target calculation: 900 + ( 900 - 800 ) = 1000
Global stocks are generally recovering and appear set for another advance.
The S&P 500 recovered above 2100; follow-through above 2120 would confirm an advance to 2200*. 13-Week Twiggs Money Flow oscillating above zero reflects long-term buying pressure. Breach of support at 2040/2050 remains unlikely, but would test primary support at 1980/2000.
* Target calculation: 2120 + ( 2120 - 2040 ) = 2200
Declining CBOE Volatility Index (VIX) is close to its lows of 2013, indicating low risk typical of a bull market.
Germany's DAX encountered resistance at Deutsche Bank's long-term target of 12500. Expect retracement to test support at 12000. Respect of support, and a short retracement, would be a bullish sign, suggesting an advance to 13000. Reversal below 12000 is unlikely, but would warn of a correction to the primary trendline at 11000.
* Target calculation: 12500 + ( 12500 - 12000 ) = 13000
Initial retracement of the Footsie respected new support at 7000. Declining 13-week Twiggs Money Flow indicates medium-term selling pressure. Expect further retracement, but reversal below 6950/7000 is unlikely.
* Target calculation: 7000 + ( 7000 - 6000 ) = 8000
Patrick Chovanec's tweet on China sums up my ambivalent attitude towards Chinese stocks:
People saying "buy China cuz it's out of favor" don't appreciate the depth of China's difficulties. This correction is just getting starred.— Patrick Chovanec (@prchovanec) April 15, 2015
The Shanghai Composite Index broke resistance at 4000 and is now retracing to test the new support level. Rising 13-week Twiggs Money Flow continues to indicate long-term buying pressure.
* Target calculation: 3400 + ( 3400 - 2400 ) = 4400
Japan's Nikkei 225 Index continues to test resistance at 20000. Rising 13-week Twiggs Momentum indicates long-term buying pressure. Breach of support at 19000 is unlikely. Breakout above 20000 would offer a long-term target of 22000*.
* Target calculation: 20000 + ( 20000 - 18000 ) = 22000
India's Sensex is approaching a watershed moment, having encountered resistance at 29000. Breakout would test 30000 and suggest an advance to 33000. Respect of resistance, however, would be a strong bear signal: reversal below 27000 would warn of a primary down-trend. 13-Week Twiggs Momentum has been slowing for the past 9 months and decline of 13-week Twiggs Money Flow to zero reinforces this. Recovery would indicate a false alarm while reversal below zero would reflect further selling.
The ASX 200 appears set for another test of resistance at 6000, the upper border of a bullish ascending triangle. Breakout above 6000 would signal an advance to 6250*. Declining 21-day Twiggs Money Flow, however, warns of medium-term selling pressure. Reversal below 5900 and the lower border of the triangle would warn of another correction.
* Target calculation: 6000 + ( 6000 - 5750 ) = 6250
Don't be afraid of missing opportunities. Behind every failure is an opportunity somebody wishes they had missed.
~ Lily Tomlin
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