Muted ASX response to Asian bulls

By Colin Twiggs
November 26th, 2013 1:00 a.m. ET (5:00 p.m. AEDT)

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Japan's Nikkei 225 is likely to retrace to test its new support level at 15000. Respect would negate the bearish divergence on 13-week Twiggs Money Flow and confirm the long-term target of 17500*. Reversal below the rising trendline, however, would warn of a correction to 12500/13000.

* Target calculation: 15000 + ( 15000 - 12500 ) = 17500

Narrow consolidation at China's Shanghai Composite upper trend channel suggests continuation of the rally. Follow-through above 2210 would signal a test of 2270. Reversal below 2180 is less likely, but would indicate a down-swing to the lower channel. The 21-day Twiggs Money Flow trough above zero suggests medium-term buying pressure. Breakout above 2270 would signal a primary up-trend.

Hong Kong's Hang Seng is likely to retrace to test the new support level at 23500. Respect would confirm an advance to 25500*, signaling a primary up-trend. Follow-through above 24000 would confirm. Rising 13-week Twiggs Money Flow indicates medium-term buying pressure. Reversal below 23500 is unlikely, but would warn of another test of 22500.

* Target calculation: 23500 + ( 23500 - 21500 ) = 25500

India's Sensex is again rallying after testing support at 20200. Breakout above its 2007/2010 highs at 21000 would confirm the primary advance, offering a target of 24000*. Another 13-week Twiggs Money Flow trough above zero would strengthen the signal. Reversal below 20200 is unlikely, but would warn of a correction to the rising trendline and primary support at 18000.

* Target calculation: 21000 + ( 21000 - 18000 ) = 24000

Singapore's Straits Times Index is struggling with resistance at 3250/3300. 13-Week Twiggs Money Flow below zero continues to warn of selling pressure. Breakout above 3300 is unlikely at present, but would signal a primary advance to 3600*. Reversal below 3120 would warn of another correction to primary support at 3000.

* Target calculation: 3300 + ( 3300 - 3000 ) = 3600

The ASX 200 continues to encounter selling pressure, with 21-day Twiggs Money Flow below zero. Reversal below the rising trendline and short-term support at 5290 would signal a correction. Breakout above 5400 is less likely, but would suggest an advance to 5600*. Follow-through above 5450 would confirm.

* Target calculation: 5450 + ( 5450 - 5300 ) = 5600

Readings on the ASX 200 VIX index are more bullish, suggesting relatively low market risk.

Moral excellence is concerned with pleasure and pain; because of pleasure we do bad things and for fear of pain we avoid noble ones. For this reason we ought to be trained from youth, as Plato says: to find pleasure and pain where we ought; this is the purpose of education.

~ Aristotle