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Pausing for breath
By Colin Twiggs
July 22, 2016 7:00 p.m. EDT (9:00 a.m. AEST)
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I do not work under an AFSL and would like to remind readers that any advice in these newsletters and on the website is provided for their general information 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.
Pausing for breath
Dow Jones Global Index is pausing for breath after having broken resistance at 316. Narrow consolidation above a new support level is a bullish sign. Follow through above the October 2015 high of 320 would add further confirmation. Momentum troughs above zero also signal trend strength.
The S&P 500 has similarly paused for breath, consolidating in a narrow flag over the last week. Flags are normally a continuation signal but I suspect we may see retracement to test the new support level at 2130 before the index advances much further.
* Target calculation: 2100 + ( 2100 - 1800 ) = 2400
Rising 13-week Momentum on the Dow Jones Industrial Average weekly chart signals a primary up-trend. Retracement that respects support at 18000/18300 would confirm.
* Target calculation: 18000 + ( 18000 - 15500 ) = 20500
Germany's DAX recovered above 10000 after finding strong support, evidenced by three large tails, at 9500. Breakout above 10500 would confirm a primary up-trend.
* Target calculation: 10500 + ( 10500 - 9500 ) = 11500
Boosted by the falling Pound, the Footsie has already signaled a primary up-trend. Retracement that respects 6500 would confirm.
* Target calculation: 6500 + ( 6500 - 6000 ) = 7000
The ASX 200 broke through resistance at 5400, signaling a primary up-trend. Expect retracement to test the new support level. The trough above zero on 13-week Twiggs Momentum suggests a healthy up-trend.
* Target calculation: 5400 + ( 5400 - 5100 ) = 5700
In Venice in the Middle Ages there was once a profession for a man called a codega—a fellow you hired to walk in front of you at night with a lit lantern, showing you the way, scaring off thieves and demons, bringing you confidence and protection through the dark streets.
~ Elizabeth Gilbert: Eat, Pray, Love