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UK and Europe: Tentative recovery

ColinTwiggs — Tue, 03 Jul 2012 05:48:41 +0000

The FTSE 100 index broke resistance (and the descending trendline) at 5600/5620, suggesting the correction has ended. Oscillation of 63-day Twiggs Momentum around zero is narrowing, indicating hesitancy. Follow-through above 5650 would strengthen the breakout signal — as would recovery of 63-day Twiggs Momentum above zero — targeting 6000*. Reversal below 5600, however, would warn of a false signal.

* Target calculation: 5600 + ( 5600 – 5200 ) = 6000

Germany’s DAX is testing resistance at 6500; breakout would test the 2012 high of 7200. Rising 13-week Twiggs Money Flow (not shown) indicates buying pressure. Recovery of 63-day Twiggs Momentum above zero would strengthen the signal.

* Target calculation: 6500 + ( 6500 – 6000 ) = 7000

The Madrid General Index is headed for a test of medium-term resistance at 750/760. Bullish divergence on 13-week Twiggs Money Flow indicates buying pressure. Penetration of resistance — and the long-term descending trendline — would indicate a bottom is forming.

Italy’s MIB Index shows a similar bullish divergence on 13-week Twiggs Money Flow (not shown) — and on 63-day Twiggs Momentum. Recovery above 15000 would signal another test of long-term resistance at 17000.

* Target calculation: 15000 + ( 15000 – 13000 ) = 17000

UK & Europe

ColinTwiggs — Mon, 28 May 2012 06:06:11 +0000

Dow Jones Europe Index found medium-term support at 220 but reversal of 13-week Twiggs Money Flow below zero warns of strong selling pressure. Breach of primary support at 210 would signal a decline to 160*, close to the 2009 low. Respect of support is less likely but would indicate a rally to 260.

* Target calculation: 210 – ( 260 – 210 ) = 160

The FTSE 100 is consolidating above 5250 on the weekly chart. 13-Week Twiggs Money Flow remains above zero but 63-day Twiggs Momentum warns of a primary down-trend. Failure of primary support at 5000/5100 would confirm.

* Target calculation: 5000 – ( 6000 – 5000 ) = 4000

UK & Europe: Closer to the breach

ColinTwiggs — Tue, 22 May 2012 04:24:54 +0000

Europe inches closer to the point when the artificial levee, built to protect European banks from market forces, is breached. Germany and France delay the inevitable while they attempt to restore bank balance sheets — by widening interest margins at the expense of depositors and transferring risky bonds to the European Central Bank . They do their utmost to avert a Greek default, because of contagion risk to the rest of the euro-zone, but their actions merely encourage more strident demands from Greece. If the levee breaks, damage will be that much greater because of the build-up of market forces behind the artificial barrier.

Spain’s Madrid General Index broke support at the 2009 low of 700, signaling another primary decline with an immediate target of 600*. Reversal of 13-week Twiggs Money Flow below zero reinforces the signal.

* Target calculation: 750 – ( 900 – 750 ) = 600

Italy’s MIB Index broke primary support at 13000, confirming the earlier signal from 63-day Twiggs Momentum and offering a long-term target of 10000*. Recovery above 13500 is unlikely but would warn of a bear trap.

* Target calculation: 13500 – ( 17000 – 13500 ) = 10000

Germany’s DAX broke support at 6500 and is testing the rising trendline. Support remains strong, with 13-week Twiggs Money Flow holding above zero, but breach of the rising trendline and breach of short-term support at 6200 would indicate a test of primary support at 5400.

France’s CAC-40 is also headed for a test of primary support at 2800. Reversal of 13-week Twiggs Money Flow below zero warns of selling pressure. Failure of primary support would offer a long-term target of 2000*.

* Target calculation: 2800 – ( 3600 – 2800 ) = 2000

The FTSE 100 found short-term support at 5300 but breach of the rising trendline and 63-Day Twiggs Momentum below zero warn of a primary down-trend. Failure of primary support at 5000/5050 would offer a long-term target of 4000*.

* Target calculation: 5000 – ( 6000 – 5000 ) = 4000

UK & Europe: Madrid at 2009 low

ColinTwiggs — Mon, 30 Apr 2012 06:11:01 +0000

The monthly chart of the Madrid General Index is testing its 2009 low of 700. With unemployment rates (24.4 per cent) similar to the US Great Depression and more than half of Spaniards under 25 jobless, there is no recovery in sight. 63-Day Twiggs Momentum oscillating below zero indicates a strong primary down-trend. Failure of support at 700 would signal another primary decline.

* Target calculation: 750 – ( 900 – 750 ) = 600

Italy’s MIB Index is more resilient, with recovery of 13-week Twiggs Money Flow above zero indicating buying pressure. Expect another test of resistance at 17000.

The CAC-40 monthly chart shows France in a similar fix. Failure of support at 3100 would indicate another test of primary support, close to the 2009 low of 2500. Recovery above 3600, however, would indicate another test of 4000 — especially if accompanied by recovery of 63-day Twiggs Momentum above 10%.

The German DAX respected support at 6500, confirming the primary up-trend. Rising 13-week Twiggs Money Flow indicates strong buying pressure. Expect another test of 7500.

The FTSE 100 respected support at 5600 and breakout above 5800 would signal an advance to 6400*. The 13-week Twiggs Money Flow trough above the zero line indicates buying pressure. Reversal below 5600 is unlikely but would warn that the primary up-trend is weakening.

* Target calculation: 6000 + ( 6000 – 5600 ) = 6400

UK & Europe: Italy threatens breakout

ColinTwiggs — Sat, 03 Mar 2012 23:40:35 +0000

Italy’s MIB Index is testing resistance at 17,000 after several weeks narrow consolidation — signaling continuation of the up-trend. Rising 13-week Twiggs Money Flow indicates buying pressure.

* Target calculation: 17,000 + ( 17,000 – 14,000 ) = 20,000

Germany’s DAX is testing medium-term resistance at 7000. Upward breakout is likely and would indicate a test of 7500*.

* Target calculation: 6500 + ( 6500 – 5500 ) = 7500

The FTSE 100 Index also encountered resistance — as indicated by short candles below 6000 over the past four weeks and the triangle pattern on 13-week Twiggs Money Flow. Breakout above 6100 would signal a fresh primary advance, while reversal below the rising trendline would warn of a correction to primary support at 5000.

* Long-term target calculation: 6000 + ( 6000 – 5000 ) = 7000

UK & Europe: Selling pressure

ColinTwiggs — Mon, 27 Feb 2012 09:49:47 +0000

The FTSE 100 is running into resistance at 6000 — note the short weekly candles and bearish divergence on (medium-term) 21-day Twiggs Money Flow. Expect retracement to test the new band of support between 5600 and 5700. The primary trend, however, remains upward; so the target of 6100 is unchanged.

Germany’s DAX has also run into medium-term selling pressure, but remains in a strong primary up-trend with a target of 7500*.

* Target calculation: 6500 + ( 6500 – 5500 ) = 7500

Italy’s MIB Index is not yet in a primary up-trend, but narrow consolidation below 17000 suggests an upward breakout. Medium-term selling pressure is evident, however, even on the long-term 13-week Twiggs Money Flow, and failure of support at 16,000 would warn of another test of the primary band at 13,000 – 13,500.

* Target calculation: 17000 + ( 17000 – 14000 ) = 20000

Europe: UK and Germany signal bull market

ColinTwiggs — Mon, 06 Feb 2012 05:47:11 +0000

The FTSE 100 broke through resistance at 5750 to signal a primary up-trend. Rising 13-week Twiggs Money Flow indicates medium-term buying pressure. Target for the initial advance is 6300*.

* Target calculation: 5700 + ( 5700 – 5100 ) = 6300

Germany’s DAX also signals a primary up-trend, with a target of 7400* for the initial advance.

* Target calculation: 6400 + ( 6400 – 5400 ) = 7400

Italy’s MIB index lags behind, but breakout above 17000 would give a similar signal, with a target of 20000*.

* Target calculation: 17000 + ( 17000 – 14000 ) = 20000

Europe approaches zero hour

ColinTwiggs — Tue, 25 Oct 2011 10:14:28 +0000

As I mentioned in an earlier post, there is bound to be a relief rally when EU leaders announce details of their rescue package — followed by a pull-back when traders figure out the costs. The danger is that Germany and France do an “Ireland” and rescue the banks but put themselves at risk. Both have public debt to GDP ratios close to 80 percent and it would not take much to push them into the danger zone. A down-grade would raise their cost of funding and place their own budgets under pressure. If they are down-graded then the kids are home alone — there will be no adults left in the room.

The FTSE 100 displays a decent bullish divergence on 13-week Twiggs Money Flow, warning of strong buying pressure. Breakout above 5600 would offer a target of 6000*, but expect retracement to test the new support level. Respect would confirm the advance.

* Target calculation: 5500 + ( 5500 – 5000 ) = 6000

Germany’s DAX is headed for 6500, but a weaker recovery on Twiggs Money Flow suggests this is a bear market rally. Respect of 6500 would indicate another test of 5000.

The French CAC-40 index displays secondary buying pressure. Respect of 3700 would signal another test of primary support at 2800.

Madrid rallied to test resistance at 900. Again buying pressure on 13-week Twiggs Money Flow appears secondary. Respect of 900 would signal a decline to the 2009 low of 700. Breakout, however, would signal a rally to test the descending trendline.

Italy’s MIB index is testing the descending trendline near 16500. Respect would test the 2009 low at 12500. Breakout would offer a target of 19000*.

* Target calculation: 16 + ( 16 – 13 ) = 19