Research & Investment | Sellers dominate

By Colin Twiggs
September 10th, 2015 4:30 p.m. AEST (2:30 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.

North America

The S&P 500 made another attempt at the new resistance level of 2000, but reversal below the previous day’s close warns that sellers dominate. 21-Day Twiggs Money Flow peaks below zero highlight medium-term selling pressure. Recovery above 2000 is unlikely but would indicate a relieving rally. Breach of short-term support at 1900 would warn of another decline; failure of 1870 would confirm.

S&P 500 Index

* Target calculation: 1900 – ( 2000 – 1900 ) = 1800

The CBOE Volatility Index (VIX) above 25 indicates elevated market risk continues.

S&P 500 VIX

Dow Jones Industrial Average is testing support at 16000. Breach would confirm a primary down-trend. Reversal of 13-week Twiggs Money Flow below zero would further strengthen the signal. Recovery above 17000 is unlikely, but would indicate a relieving rally.

Dow Jones Industrial Average

Canada’s TSX 60 retreated below 800, warning of another decline. Follow-through below 790 would confirm a primary down-trend. Declining 13-week Twiggs Momentum below zero already indicates a bear market. Recovery above 820 is unlikely, but would indicate a relieving rally.

TSX 60 Index

* Target calculation: 800 – ( 900 – 800 ) = 700

Europe

Germany’s DAX made a false break above 10400, warning that sellers dominate. Respect of the zero line by 21-day Twiggs Money Flow indicates strong medium-term selling pressure. Reversal below 10000 would signal a primary down-trend.

DAX

The Footsie is testing resistance at 6250. Breakout would signal a relieving rally. But this is still a bear market and respect of the zero line (from below) by 21-day Twiggs Money Flow would warn of strong (medium-term) selling pressure. Reversal below 6000 would warn of another decline. Follow-through below 5900 would confirm a primary down-trend.

FTSE 100

Asia

The Shanghai Composite Index continues to test support at 3000. Declining 13-week Twiggs Momentum below zero indicates a primary down-trend.

Dow Jones Shanghai Index

Hong Kong’s Hang Seng Index recovered above 21000 and is likely to test the former primary support level at 23000. Declining 13-week Twiggs Money Flow (below zero) confirms long-term selling pressure. This is a bear rally and reversal below 21000 would signal another decline.

Hang Seng Index

Japan’s Nikkei 225 is headed for a test of resistance at 19000 after finding support at 17500. The strong blue candle is a bullish sign and breakout above 19000 would signal another test of resistance at 21000. Recovery of 21-day Twiggs Money Flow above zero would indicate medium-term buying pressure; respect is less likely but would warn of another decline.

Nikkei 225 Index

* Target calculation: 19000 + ( 19000 – 17500 ) = 20500

India’s Sensex commenced a bear rally, heading for a test of the new resistance level at 26500. 13-Week Twiggs Money Flow above zero indicates medium-term buying pressure. Recovery above 26500 is unlikely, but would warn of a bear trap. Respect of resistance would suggest another decline. Breach of support at 25000 would signal a bear market; reversal of 13-week Twiggs Money Flow below zero would confirm.

SENSEX

* Target calculation: 25000 – ( 26500 – 25000 ) = 23500

Australia

A bearish engulfing candlestick on the ASX 200 warns of another test of primary support at 5000. Reversal of 21-day Twiggs Money Flow below zero would indicate medium-term selling pressure. Breach of 5000 would confirm a primary down-trend. Recovery above 5300 is unlikely at this stage, but would indicate a bear rally.

ASX 200

* Target calculation: 5000 – ( 5400 – 5000 ) = 4600

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