Mildly bearish sentiment in the US and Europe is causing hesitancy on the ASX 200, while China continues to consolidate above long-term support.
The S&P 500 retreated below resistance at 1700, indicating a test of support at 1675. Longish tails on the last two candles are indicative of buying. Recovery above 1700 would signal continuation of the advance to 1800*. Bearish divergence on 21-day Twiggs Money Flow, however, reflects selling pressure and breach of 1675 is more likely, testing the stronger support level at 1650. Primary support is some way off at 1560.
* Target calculation: 1680 + ( 1680 – 1560 ) = 1800
Recovery of Dow Jones Europe Index above 290 indicates an advance to 310*. Follow-through above 295 strengthens the signal, but divergence on 13-week Twiggs Momentum suggests that a top may be forming. Reversal of TMO below zero would strengthen the warning.
* Target calculation: 290+ ( 290 – 270 ) = 310
China’s Shanghai Index holds steady above long-term support at 1950. Breakout above 2100 would suggest a rally to the downward trendline, but declining 13-week Twiggs Money Flow warns of selling pressure and breach of support at 1950 would offer a target of 1750*.
* Target calculation: 1950 – ( 2150 – 1950 ) = 1750
Australia’s ASX 200 found support at 5000 after falling sharply on Wednesday. Recovery above 5100 would indicate another test of 5250. Oscillation of 21-day Twiggs Money Flow close to zero suggests hesitancy. Breach of 5000 is as likely, and would test the stronger support level of 4850, providing a more robust foundation for further advances.