East to West: Europe steadies, S&P powers on

Dow Jones Euro Stoxx 600 found support at 380 and is now headed for a test of recent highs at 395. Bearish divergence on the Trend Index continues to warn of selling pressure but recovery above the declining trendline (on the Trend Index) would indicate that pressure has eased. Breakout above 395 would signal another primary advance, with a target of 425*.

DJ Euro Stoxx 600

Target 395 + ( 395 – 365 ) = 425

Conclusion of phase I of Brexit negotiations helped the Footsie find support at 7300. Trend Index continues to warn of selling pressure. Breach of 7200 is unlikely at present but would signal a primary down-trend. Breakout above 7600 would signal a primary advance, but is also unlikely. Expect further consolidation.

FTSE 100

In Asia, South Korea’s Seoul Composite Index is undergoing a correction but seems to have found support at 2450. Respect of the rising trendline would confirm the primary up-trend.

Seoul Composite Index

Japan’s Nikkei 225 Index found solid support at 22000, with long tails signaling buyer enthusiasm. The trend index trough high above zero indicates strong buying pressure.

Nikkei 225 Index

China’s Shanghai Composite Index is undergoing a correction. A long tail suggests support at 3250. Bearish divergence on the Trend Index warns of selling pressure but this appears to be secondary in nature.

Shanghai Composite Index

India’s NSE Nifty Index found support at 10000 after a weak correction. Recovery above 10500 is likely and would warn of another primary advance.

Nifty Index

Target 10500 + ( 10500 – 10000 ) = 11000

In the US, the S&P 500 continues to shrug off concerns regarding high valuations and a flattening yield curve. The rising Trend Index indicates buying pressure.

S&P 500

The Nasdaq 100 continues its strong bull market, powered by the big five tech stocks (Apple, Amazon, Alphabet, Microsoft and Facebook). Corrections are mild and of short duration, typical of the latter stages of a bull market.

Nasdaq 100

East to West: European tremors

Complacency in Europe has been shaken, with Dow Jones Euro Stoxx 600 testing medium-term support at 380. Bearish divergence on the Trend Index, with intervening troughs below zero, warns of strong selling pressure. Breach of 380 is likely and would indicate a test of primary support at 366.

DJ Euro Stoxx 600

The UK’s Footsie broke medium-term support at 7350 and is headed for a test of primary support at 7200. Bearish divergence on the Trend Index again warns of strong selling pressure. Breach of 7200 would signal reversal to a primary down-trend.

FTSE 100

Asia was also affected, with Japan’s Nikkei 225 Index the only major index to end the week on a positive note, after finding solid support at 22000.

Nikkei 225 Index

South Korea’s Seoul Composite Index below 2500 warns of a correction, though nothing more.

Seoul Composite Index

China’s Shanghai Composite Index broke support at 3340 to warn of a correction. Bearish divergence on the Trend Index warns of selling pressure but this appears to be secondary in nature.

Shanghai Composite Index

India’s NSE Nifty Index is still bullish but reversal below 10000 would warn of a strong correction.

Nifty Index

Target 10000 + ( 10000 – 9000 ) = 11000

The S&P 500 is as bear-proof as you can get in the current climate, with the trend index reflecting strong buying pressure.

S&P 500

A bear market in Europe may not be sufficient to dent the animal spirits driving US markets but would certainly influence more cautious investors to change to a risk-off stance and shorten the time left for more adventurous souls.

East to West: China sell-off

Four markets worth our attention this week:

China’s Shanghai Composite Index displays strong selling pressure, testing medium-term support at 3340. Breach of support is likely and would warn of a strong correction, with an immediate target of 3200.

Shanghai Composite Index

India’s NSE Nifty Index displays strong support at 10000. Recovery above 10500 would signal an advance to 11000.

Nifty Index

Target 10000 + ( 10000 – 9000 ) = 11000

Moving to Europe, Dow Jones Euro Stoxx 600 found medium-term support at 380. Bearish divergence on the Trend Index warns of selling pressure. Breach of support at 380 would be a strong bear signal but respect of the rising trendline is more likely and recovery above the recent high would signal a fresh advance.

DJ Euro Stoxx 600

The UK’s Footsie found support at 7350 but bearish divergence on the Trend Index warns of long-term selling pressure. Breakout above 7550 is unlikely at this stage.

FTSE 100

East to West: Still mostly bullish apart from EU & China

South Korea’s Seoul Composite Index continues in a strong up-trend despite the nuclear threat from its northern neighbor. The latest retracement appears mild and likely to test the rising trendline around 2450.

Seoul Composite Index

Japan’s Nikkei 225 Index also retraced but the long tail on this week’s candle indicates solid support at 22000.

Nikkei 225 Index

Hong Kong’s Hang Seng continues in a strong bull trend, with the Trend Index respecting the zero line.

Shanghai Composite Index

China’s Shanghai Composite Index is consolidating above support at 3340. Bearish divergence on the Trend Index warns of selling pressure but this appears to be secondary in nature, warning of no more than a correction.

Shanghai Composite Index

India’s NSE Nifty Index is also in a bull trend, with the Trend Index respecting zero. Respect of the rising trendline is likely and would signal a fresh advance.

Nifty Index

Target 10000 + ( 10000 – 9000 ) = 11000

Moving to Europe, Dow Jones Euro Stoxx 600 shows a stronger correction, with bearish divergence on the Trend Index warning of selling pressure.

DJ Euro Stoxx 600

The UK’s Footsie displays a stronger bearish divergence and the index is likely to test primary support at 7200.

FTSE 100

The S&P 500 displays a strong bull trend but penetration of the rising trendline is likely to lead to a correction to 2500.

S&P 500

East to West: S&P 500 leads the bulls

Let us start in the East, with the canary in the coal mine. The Seoul Composite Index completely ignored the nuclear threat from its northern neighbor, surging in a strong primary up-trend.

Seoul Composite Index

Japan’s Nikkei 225 Index likewise ignored the threat of a nuclear DPRK, advancing strongly since breaking resistance at 21000.

Nikkei 225 Index

China’s Shanghai Composite Index is also advancing, albeit at a more modest pace.

Shanghai Composite Index

India’s NSE Nifty Index displays strong buying pressure, with Twiggs Trend Index oscillating above the zero line.

Nifty Index

Target 10000 + ( 10000 – 9000 ) = 11000

Moving to Europe, Dow Jones Euro Stoxx 600 broke resistance at 395 and is likely to test its 2015 high.

DJ Euro Stoxx 600

Despite BREXIT fears, the UK’s Footsie has recovered to test resistance at 7600. Breakout would offer a target of 8000*.

FTSE 100

* Target calculation: 7600 + ( 7600 – 7200 ) = 8000

The S&P 500 leads the pack. With Trend Index troughs above zero and barely a correction in sight, the index displays exceptional buying pressure. At some point the Fed will take the punch bowl away but the party is likely to continue in full swing until then.

S&P 500

Asian stocks rally, Europe follows

Asian stocks have started to rally and Europe is likely to follow. Canada faces stronger headwinds and is expected to struggle to break resistance at 900.

Starting near Korean epicenter of political tensions, the Seoul Composite Index remains bullish. Though breach of the rising trendline could change matters in an instant. No hint of panic selling….yet.

Seoul Composite Index

China’s Shanghai Composite Index finally broke through resistance at 3300, offering a target of 3500. The Trend Index oscillating above zero indicates long-term buying pressure.

Shanghai Composite Index

Japan’s Nikkei 225 Index encountered strong resistance at 20000 but a rounding top is a bullish sign. Recovery above 20000 is likely and would signal a fresh advance.

Nikkei 225 Index

India’s NSE Nifty Index is testing resistance at 10000. Twiggs Trend Index oscillating above zero signals long-term buying pressure. Breakout is likely and would indicate a fresh advance with a long-term target of 11000*.

Nifty Index

Target 10000 + ( 10000 – 9000 ) = 11000

In Europe, the UK’s Footsie, beset with BREXIT issues, still managed to respect support at 7300, avoiding a primary down-trend. Another test of 7600 is likely but breakout and another primary advance appear remote given the loss of momentum and selling pressure signaled by the declining Trend Index.

FTSE 100

Dow Jones Euro Stoxx 600 found support at the rising trendline, around 370. Recovery of the Trend Index above zero is likely. Follow-through above 380 would suggest another primary advance.

DJ Euro Stoxx 600

Moving to North America, Canada’s TSX 60 continues to consolidate in a narrow line below the former primary support level at 900. Declining Trend Index warns of long-term selling pressure. Breach of support at 880 is likely and would confirm a primary down-trend.

TSX 60