ASX rallies while Aussie Dollar finds support

The Australian Dollar is consolidating between (primary) support at $0.8650 and resistance at $0.8900. Respect of support suggests another test of $0.89, while a failed swing (reversal below $0.8850) would warn of a downward breakout. Continuation of the primary down-trend is likely and breach of $0.8650 would signal a decline with a target of $0.80*.

AUDUSD

* Target calculation: 0.87 – ( 0.94 – 0.87 ) = 0.80

The ASX 200 is headed for a test of 5660. Retracement is likely, but respect of support at 5440 would strengthen the bull signal. Rising 21-day Twiggs Money Flow continues to indicate medium-term buying pressure. Reversal below 5440 is unlikely, but would warn of a test of 5250.

ASX 200

The ASX 200 VIX continues to indicate low risk typical of a bull market.

ASX 200

ASX breaks resistance

The Australian Dollar continues to test resistance at $0.8900. Tall shadows in the past few weeks suggest committed sellers. Breach of primary support at $0.8650 would warn of another decline. 13-Week Twiggs Momentum below zero also indicates a primary down-trend.

AUDUSD

* Target calculation: 0.87 – ( 0.94 – 0.87 ) = 0.80

ASX 200 broke resistance at 5440, suggesting another test of 5660. Rising 21-day Twiggs Money Flow indicates medium-term buying pressure. Reversal below 5440, however, would warn of a test of support at 5250.

ASX 200

The ASX 200 VIX below 15 continues to indicate low risk typical of a bull market.

ASX 200

Aussie Dollar and ASX find support

The Australian Dollar is testing resistance at $0.8900, but the primary trend is down. Breakout would suggest a bear rally, while respect would warn of another decline. 13-Week Twiggs Momentum below zero indicates a primary down-trend. Breach of primary support at $0.8650 would offer a target of $0.80*.

AUDUSD

* Target calculation: 0.87 – ( 0.94 – 0.87 ) = 0.80

ASX 200 penetrated its descending trendline, suggesting the correction is over. The index would be further buoyed by a rally of the Aussie Dollar. Bullish divergence and recovery of 21-day Twiggs Money Flow above zero indicates medium-term buying pressure. Breach of resistance at 5350 would strengthen the bull signal. Reversal below 5250, however, would warn of a test of primary support at 5000/5050.

ASX 200

* Target calculation: 5350 – ( 5650 – 5350 ) = 5050

The ASX 200 VIX at 15.5 continues to indicate low risk typical of a bull market. A significantly higher trough is unlikely, but would be a bearish sign.

ASX 200

October sell-off: Drawing to a close?

  • DAX and FTSE find support, but remain in a down-trend
  • China is bullish, but Japan bearish
  • US stocks find support and continue to indicate a bull market
  • ASX respects primary support

The S&P 500 found support at 1820 and is testing resistance at 1900. Breach of resistance would suggest that the correction is over. 21-Day Twiggs Money Flow below zero, however, continues to warn of medium-term selling pressure. Respect of resistance is more likely, indicating another test of support at 1800*.

S&P 500 Index

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

CBOE Volatility Index (VIX) retreated to 22, indicating moderate risk, but nowhere near the 30+ levels typical of a bear market.

S&P 500 VIX

Dow Jones Industrial Average recovered above resistance (the former support level) at 16300, the long tail indicating short-term buying pressure. Follow-through above the descending trendline would signal that the correction is over. Recovery above the recent highs at 25% on 13-week Twiggs Money Flow would suggest that buyers have regained control.

Dow Jones Industrial Average

Germany’s DAX is retracing to test resistance at 9000. Respect would confirm a primary down-trend. 13-Week Twiggs Momentum below zero strengthens the bear signal. Target for the decline is 8000*. Recovery above 9000 remains unlikely, but would warn of a bear trap.

Dow Jones Euro Stoxx 50

* Target calculation: 9000 – ( 10000 – 9000 ) = 8000

The Footsie displays a similar long tail, indicating buying pressure. Recovery above 6500 is unlikely, but would warn of a bear trap. Respect of resistance would offer a target of 6000*.

FTSE 100 Index

* Target calculation: 6400 – ( 6800 – 6400 ) = 6000

China’s Shanghai Composite Index is testing support at 2340/2350. Breach would warn of a correction. But the primary up-trend remains and rising 13-week Twiggs Money Flow signals medium-term buying pressure.

Shanghai Composite Index

Japan’s Nikkei 225 Index plunged through support at 14800, warning of a test of primary support at 13900/14000. Reversal of 13-week Twiggs Money Flow below zero indicates (long-term) selling pressure.

Nikkei 225 Index

The ASX 200 recovered above resistance at 5250 and the descending trendline, suggesting that the correction is over. Bullish divergence and a rising 21-day Twiggs Money Flow (above zero) indicates medium-term buying pressure. Recovery above 5350 would confirm that buyers are back in control, while reversal below 5250 would indicate another test of 5000/5050.

ASX 200

* Target calculation: 5350 – ( 5650 – 5350 ) = 5050

ASX 200 VIX remains below 20, indicating low risk typical of a bull market.

ASX 200 VIX

ASX and Aussie Dollar rally

The Australian Dollar found support at $0.8650/$0.8700. Respect of resistance at $0.8900, however, would suggest another decline. 13-Week Twiggs Momentum below zero warns of a primary down-trend. Breach of primary support at $0.8650 would offer a target of $0.80*.

AUDUSD

* Target calculation: 0.87 – ( 0.94 – 0.87 ) = 0.80

The ASX 200 rallied in line with short-term buoyancy on the Aussie Dollar. Bullish divergence on 21-day Twiggs Money Flow and recovery above zero indicates medium-term buying pressure. But the trend remains down and failure of (short-term) support at 5120 would warn of a test of primary support at 5000/5050. Breach of the declining trendline is unlikely, but would suggest that the correction is ending. Follow-through above 5350 would confirm.

ASX 200

* Target calculation: 5350 – ( 5650 – 5350 ) = 5050

The ASX 200 VIX continues to indicate low risk typical of a bull market.

ASX 200

ASX 200 rallies

The ASX 200 rallied on the back of positive sentiment from the US. Follow-through above 5360 would indicate the correction is over. Rising 21-day Twiggs Money Flow reflects short-term buying pressure. Reversal below 5240 remains as likely, however, and would warn of a test of primary support at 5000/5050.

ASX 200

* Target calculation: 5350 – ( 5650 – 5350 ) = 5050

The ASX 200 VIX retreated below 15 — levels typical of a bull market.

ASX 200

ASX finds support

After taking a beating in the morning session, the ASX 200 rallied to close almost unchanged. The long tail and rising 21-day Twiggs Money Flow indicate short-term buying pressure. Follow-through above 5360 and the declining trendline would suggest that the correction is over. But reversal below 5240 remains as likely and would warn of a test of primary support at 5000/5050.

ASX 200

* Target calculation: 5350 – ( 5650 – 5350 ) = 5050

The ASX 200 VIX is creeping upwards, but remains at levels typical of a bull market.

ASX 200

ASX tests resistance

The ASX 200 found resistance at 5350. Respect of the zero line (from below) by 21-day Twiggs Money Flow warns of continued selling pressure. Failure of support at 5250 would warn of a test of primary support at 5000/5050. Recovery above 5350 is less likely, but would suggest another rally.

ASX 200

* Target calculation: 5350 – ( 5700 – 5350 ) = 5000

The ASX 200 VIX is rising, but remains at levels typical of a bull market.

ASX 200

Aussie Dollar and ASX find short-term support

The Australian Dollar found support at $0.8650/$0.8700 and is likely to retrace to test the new resistance level at $0.8850/$0.8900. Declining 13-week Twiggs Momentum (below zero) signals a primary down-trend. Respect of resistance is likely and breach of primary support ($0.8650) would offer a target of $0.80*.

AUDUSD

* Target calculation: 0.87 – ( 0.94 – 0.87 ) = 0.80

The ASX 200 is also retracing and likely to test resistance around 5350. Peaks below zero on 13-week Twiggs Money Flow warn of long-term selling pressure. Respect of resistance is likely and would warn of a test of 4900/5000*.

ASX 200

* Target calculation: 5350 – ( 5700 – 5350 ) = 5000

The ASX 200 VIX is rising, but remains at levels typical of a bull market.

ASX 200

Aussie under the pump but ASX finds support

The Aussie Dollar is now testing support at $0.89 after negative projections from Nouriel Roubini’s team. Reversal of 13-week Twiggs Momentum below zero warns of a primary down-trend, but expect further support at $0.8650/$0.8700. Breach would confirm a target of $0.80*.

AUDUSD

* Target calculation: 0.87 – ( 0.94 – 0.87 ) = 0.80

The ASX 200 is testing support at 5300/5350. Long tails on the last two candles suggest short/medium-term buying pressure, but 13-week Twiggs Money Flow below zero warns of long-term selling pressure. Recovery above 5450 would suggest another rally, while breach of 5300 would warn of a fall to 4900/5000*.

ASX 200

* Target calculation: 5350 – ( 5700 – 5350 ) = 5000

The ASX 200 VIX is rising, but remains at levels typical of a bull market.

ASX 200

Aussie dollar leads ASX lower

The Australian Dollar found short-term support at $0.90 after last week’s fall. Reversal of 13-week Twiggs Momentum below zero warns of another decline, but expect support at $0.89/$0.90 and at $0.8650/$0.8700. Breach of the latter would confirm a target of $0.80*.

AUDUSD

* Target calculation: 0.87 – ( 0.94 – 0.87 ) = 0.80

The ASX 200 is testing a wide band of support between 5420 and 5460. Reversal of 21-day Twiggs Money Flow below zero warns of strong selling pressure. Breach of the rising trendline would suggest a correction to test the primary trendline around 5000. Support levels are indistinct because of frequent back-filling, however, and could establish anywhere between 5300 and 5450.

ASX 200

The ASX 200 VIX is rising, but levels below 20 are typical of a bull market.

ASX 200

ASX selling pressure

The ASX 200 is falling sharply despite strong performance in China. Breach of the rising trendline (around 5400) would indicate a correction to test the primary trendline around 5000. The support level is indistinct because of frequent back-filling and could establish anywhere between 5300 and 5450. Reversal of 13-week Twiggs Money Flow below zero after a bearish divergence warns of strong selling pressure. Respect of support at the secondary trendline is therefore unlikely.

ASX 200

* Target calculation: 5650 + ( 5650 – 5450 ) = 5850

The ASX 200 VIX is rising, but low levels remain typical of a bull market.

ASX 200

Dow Jones Shanghai Index continues to make strong gains since commencing a primary up-trend, but expect further resistance between 310 and 315, at the 2013 high.

DJSH

ASX 200 finds support

The ASX 200 found support above 5560 and is likely to re-test resistance between 5640 and 5680. Breakout would signal an advance with a target of 5850*. Completion of another 21-day Twiggs Money Flow trough above zero would indicate renewed buying pressure. Reversal below 5540, however, would warn of a test of support between 5440 and 5500 (the rising trendline).

ASX 200

* Target calculation: 5650 + ( 5650 – 5450 ) = 5850

Readings for the ASX 200 VIX remain low, typical of a bull market.

ASX 200

ASX 200 retraces to test new support level

The ASX 200 broke resistance at 5650, but is now retracing to test the new support level. Reversal below 5620 would warn of another test of 5450, but respect of support is more likely and follow-through above 5680 would confirm an advance, offering a target of 5850*. Completion of another 21-day Twiggs Money Flow trough above zero would strengthen the signal.

ASX 200

* Target calculation: 5650 + ( 5650 – 5450 ) = 5850

Low readings for the ASX 200 VIX are typical of a bull market.

ASX 200

ASX finds support

The ASX 200 found short-term support at 5630 and continuation of the US rally would see a breakout above resistance at 5650. Follow-through above 5680 would confirm the advance, offering a target of 5850*. Completion of another 21-day Twiggs Money Flow trough above zero would strengthen the signal. Reversal below 5550 is unlikely, but would warn of a test of primary support at 5360/5380.

ASX 200

* Target calculation: 5650 + ( 5650 – 5450 ) = 5850

Retreat of the ASX 200 VIX below 12 indicates low risk typical of a bull market.

ASX 200

ASX 200 strong rally

The ASX 200 is rallying strongly, led by US and Chinese markets. Breakout above 5650 would indicate an advance to 5750. Completion of another 13-week Twiggs Money Flow trough above zero would strengthen the signal. Reversal below the rising trendline is unlikely, but would warn of a test of primary support at 5050.

ASX 200

* Target calculation: 5550 + ( 5550 – 5350 ) = 5750

Retreat of the ASX 200 VIX below 12 indicates low risk typical of a bull market.

ASX 200

ASX rallies

The ASX 200 rallied after a strong showing in US and Chinese markets. Recovery above 5550 would suggest an advance to 5750. Completion of another 13-week Twiggs Money Flow trough above zero would strengthen the signal. Reversal below the rising trendline now appears unlikely, but would warn of a test of primary support at 5050.

ASX 200

* Target calculation: 5550 + ( 5550 – 5350 ) = 5750

Retreat of the ASX 200 VIX below 15 suggests low risk typical of a bull market.

ASX 200

Two questions for Australian investors

Two questions for Australian investors:

  1. Does the graph below show an up-trend?
  2. Would it be a good time to buy this stock?

ASX 200

If your answer to both questions is NO, then why would you consider selling when we invert the price scale? The chart is the ASX 200 index. Use View >> Invert Price Scale, or Ctrl+I shortcut key to invert the chart.

ASX 200

* Target calculation: 5550 + ( 5550 – 5350 ) = 5750

The chart below is not inverted. The ASX 200 VIX tends to behave inversely to the index. A value of 12.2 suggests low risk typical of a bull market.

ASX 200

The Australian Dollar is retracing to test support at $0.92. Respect would indicate that buyers continue to dominate. Recovery above resistance at $0.94 would suggest an advance to $0.97. Follow-through above $0.945 would confirm. Breach of $0.92 remains unlikely, but would warn of a test of primary support at $0.8650/$0.87.

AUDUSD