Flight to safety

By Colin Twiggs
August 9, 2019 9:00 p.m. EDT (11:00 a.m. AEST)

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Important News

Dear Friends,

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Global markets and the Flight to Safety

10-Year Treasury yields are near record lows after Donald Trump's announcement of further tariffs on China. The fall reflects the flight to safety, with rising demand for Treasuries as a safe haven.

Crude found support at $50/barrel. Breach would warn of a new down-trend, with a target of $40/barrel. Declining crude prices reflect a pessimistic outlook for the global economy.

The S&P 500 found support at 2850. Rising volatility warns of increased market risk. A test of support at 2750 remains likely.

Declining Money Flow on the Nasdaq 100 reflects rising selling pressure. Expect a test of 7000.

The Shanghai Composite Index broke support at 2850. A Trend Index peak at zero warns of strong selling pressure. Expect a test of support at 2500.

India's Nifty is testing support at 11,000. Breach would offer a target of 10,000.

Dow Jones Euro Stoxx 600, reflecting large cap stocks in the European Union, is is testing primary support at 368. Strong bearish divergence on the Trend Index warns of a double-top reversal, with a target of 330.

The Footsie is similarly testing support at 7150. Breach would offer a target of 6600.

I have warned my clients to cut exposure to the market. It's a good time to be cautious.

"There is a time for all things, but I didn't know it. And that is precisely what beats so many men in Wall Street who are very far from being in the main sucker class. There is the plain fool, who does the wrong thing at all times everywhere, but there is the Wall Street fool, who thinks he must trade all the time."

~ Jesse Livermore

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Disclaimer

Colin Twiggs is director of The Patient Investor Pty Ltd, an Authorised Representative (no. 1256439) of MoneySherpa Pty Limited which holds Australian Financial Services Licence No. 451289.

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