Dow Hesitant, Nikkei Marches On
By Colin Twiggs
June 30, 2007 4:00 a.m. EST (6:00 p.m. AEST)
These extracts from my trading diary are for educational purposes and should not be interpreted as investment advice. Full terms and conditions can be found at Terms of Use.
USA: Dow, Nasdaq and S&P500
The Dow Jones Industrial Average is consolidating at the upper border of its 3-year trend channel while Twiggs Money Flow fell to below zero, signaling distribution.
Long Term: The primary trend is up, with support at 12000 and 12800.
Short Term: Downward breakout below 13250 would warn of a secondary correction. On the other hand, a rise above 13700 would signal another primary advance - which could accelerate into a blow-off.
Both UPS and Fedex are edging upwards, but the Dow Jones Transportation Average is retreating toward another test of support at 5000. Twiggs Money Flow signals distribution and a (DJTA) close below 5000 would signal weakness.
The Nasdaq Composite is consolidating in an ascending
broadening wedge; a failed up-swing would warn of a downward
breakout and secondary correction.
Long Term: The primary trend remains upwards, with
support at 2340 and 2500 (from 2525).
The S&P 500 shows similar consolidation to the Dow,
with
Twiggs Money Flow (21-day) signaling distribution. Breakout
below 1490 would warn of a secondary correction; while a rise
above 1540, though unlikely in the present circumstances, would
signal a further primary advance.
Long Term: The primary trend remains up, with support
levels at 1460 and 1375.
LSE: United Kingdom
The FTSE 100 appears stronger than US markets, rallying
off the lower border of an ascending broadening wedge, while
Twiggs Money Flow is recovering. Expect a swing to test the
upper border of the formation. Breakout from the wedge, or a
failed swing, will indicate future direction.
Long Term: The primary up-trend continues, with support
at 6000 and 6450.
Japan: Nikkei
The Nikkei 225 is testing resistance at the February
2007 high of 18215, while
Twiggs Money Flow signals accumulation. The medium-term
target for an upward breakout is 19800
(18200+[18200-16600]).
Long Term: The primary trend remains up, with primary
support at 16600. The long-term target is 21000
(17500+[17500-14000]).
China: Hang Seng
The Hang Seng is consolidating below resistance at 22000, while Twiggs Money Flow signals short-term distribution. The calculated target for an upward breakout is 23300 (21000+[21000-18700]). Downward breakout is less likely and would signal a test of the new support level at 21000; reversal below 21000 is not expected.
ASX: Australia
The All Ordinaries is consolidating at the upper border
of the trend channel. Downward breakout would warn of a
secondary correction, while upward breakout would signal a
further primary advance.
Twiggs Money Flow (21-day) displays a short-term bull, but
long-term bear signal.
Long Term: The primary trend remains up, with support at
5650 and 6000.
Short Term: The index continues in a broadening top formation. Look for a failed swing or breakout to indicate future direction. Respect of 6200 would be a bullish sign. Large volume on Friday is most likely attributable to profit-taking (or loss-taking) at the tax year-end, so we should not read too much into this.
On the occasion of every accident that befalls you, remember to
turn to yourself and inquire what power you have for turning it
to use.
~ Epictetus
To understand my approach, please read Technical Analysis & Predictions in About The Trading Diary.