Gold says no Grexit
By Colin Twiggs
July 2nd, 2015 6:30 p.m. AET (4:30 a.m. EDT)
Advice herein is provided for the general information of readers 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.
Performance Update
The S&P 500 Prime Momentum strategy returned +22.67%* for the 12 months ended 30th June 2015, compared to +7.42% for the S&P 500 Total Return Index. Macroeconomic and volatility filters continue to indicate low to moderate risk and we maintain full exposure to equities.
The ASX200 Prime Momentum strategy will be available tomorrow.
Splitting your investment between the ASX 200 and S&P 500 strategies may enhance diversification and help to reduce volatility.
* Results are unaudited and subject to revision.
Europe and Greece
Gold is unfazed by the Greek crisis. Normally the preferred haven during any international upheaval, gold broke medium-term support at $1170, warning of a test of the primary level at $1140 per ounce.
* Target calculation: 1200 - ( 1400 - 1200 ) = 1000
Niels Jensen at Absolute Return Partners sums up Greece's referendum with this observation:
Bookmakers Ladbrokes are also firmly backing a "Yes" vote, with odds of 3 to 1 in favor.
Germany and the UK
Germany's DAX is testing support at 11000. Recovery of 13-week Twiggs Money Flow above its descending trendline suggests that selling pressure is easing. Follow-through above 11500 would signal a fresh advance.
Outside of the Euro-zone, the Footsie broke support at 6700, indicating a test of primary support at 6100. Breach of primary support is unlikely and a 13-week Twiggs Money Flow trough above zero would signal buying support.
* Target calculation: 6700 - ( 7100 - 6700 ) = 6300
North America
The S&P 500 is testing medium-term support at 2040. Declining 13-week Twiggs Money Flow indicates moderate selling pressure. The index is likely to range between 2040 and 2120 until there is certainty about the situation in Europe.
* Target calculation: 2120 + ( 2120 - 2040 ) = 2200
The CBOE Volatility Index (VIX) spiked briefly but remains at low levels typical of a bull market.
Canada's TSX 60 broke support at 850, warning of a test of primary support at 800. Resource-rich economies like Canada and Australia have been hard hit by the decline in commodity prices. Decline of 13-week Twiggs Momentum below zero warns of further weakness. Recovery above the descending trendline and 875 is unlikely at present.
* Target calculation: 850 - ( 900 - 850 ) = 800
Asia
The Shanghai Composite broke support at 4000 today, closing at 3912 and warning of a test of 3000*. Bearish divergence on 13-week Twiggs Money Flow indicates medium-term selling pressure. Recovery above 4500 is unlikely at present.
* Target calculation: 4000 - ( 5000 - 4000 ) = 3000
Japan's Nikkei 225 continues to test support at 20000. Respect and follow-through above 20500 would suggest an advance to 22000*. Recovery of 13-week Twiggs Money Flow above its descending trendline would strengthen the signal. Breach of 20000, however, would warn of a correction.
* Target calculation: 20000 + ( 20000 - 18000 ) = 22000
India's Sensex is testing resistance at 28000 (28035 at 1:42 p.m. IST). Breakout would signal another test of 30000. A higher trough on 13-week Twiggs Money Flow indicates medium-term buying pressure. Breach of support at 26500 is unlikely, but would warn of a primary down-trend with support at 23000*.
* Target calculation: 26500 - ( 30000 - 26500 ) = 23000
Australia
The ASX 200 recovered above support at 5450. Follow-through above 5650 and the descending trendline would signal the correction is over, but respect of resistance remains as likely and would warn of further weakness. 13-Week Twiggs Money Flow is now gradually rising, indicating moderate buying pressure.
Ability is of little account without opportunity.
~ Napoleon Bonaparte
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