- US stocks have reaffirmed their bull market
- European stocks are recovering
- China and Japan signal up-trends
- ASX is rising
- Gold is falling
The new reporting season is under way and fund managers are now looking for opportunities rather than selling off under-performers.
Dow Jones Industrial Average made a new high, above 17300, signaling a primary advance. Reversal below 17000 and the rising trendline is most unlikely, but would warn of another correction. Target for the advance is 18000*.
* Target calculation: 17000 + ( 17000 – 16000 ) = 18000
The S&P 500 similarly made a new high, signaling a fresh advance. Rising 13-week Twiggs Money Flow (above zero) indicates medium-term buying pressure. Target for the advance is 2150*. Reversal below 2000 and the rising trendline is unlikely, but would signal another correction.
* Target calculation: 2000 + ( 2000 – 1850 ) = 2150
CBOE Volatility Index (VIX) at 14 indicates low risk typical of a bull market.
Dow Jones Euro Stoxx 50 continues to advance above its former primary support level at 3000. Long tails on the weekly candlesticks and recovery of 13-week Twiggs Money Flow above zero indicate buying pressure. Expect another test of 3300. Reversal below 3000 is less likely, but would signal a primary down-trend.
* Target calculation: 3000 – ( 3300 – 3000 ) = 2700
China’s Shanghai Composite Index rallied above its recent high at 2400, confirming a primary up-trend. Target for the new advance is 2500*. and the rising trendline, warning of a correction. Rising 13-week Twiggs Money Flow trough (above zero) indicates medium-term buying pressure; completion of a trough high above zero would signal trend strength.
* Target calculation: 2400 + ( 2400 – 2300 ) = 2500
Japan’s Nikkei 225 Index broke resistance at 16300, signaling an advance with a long-term target of 18000*. Reversal below 16000 is unlikely, but would warn of another correction.
* Target calculation: 16000 + ( 16000 – 14000 ) = 18000
The ASX 200 is headed for a test of resistance at 5660. Brief retracement at 5440 and rising 21-day Twiggs Money Flow (above zero) both indicate medium-term buying pressure. Reversal below 5440 is unlikely, but would indicate a test of 5250. I have lowered the target to 6000* because of constant back-filling in recent months.
* Target calculation: 5650 + ( 5650 – 5300 ) = 6000