East to West: Asia, Europe weaken but US powers on

Starting with Asia, South Korea’s Seoul Composite Index continues to test support at 2450. Bearish divergence on the Trend Index warns of selling pressure but this appears secondary in nature. Breach of the rising trendline would warn that the primary up-trend is losing momentum.

Seoul Composite Index

Japan’s Nikkei 225 Index is consolidating between 22000 and 23000. A Trend Index trough high above zero indicates strong buying pressure.

Nikkei 225 Index

China’s Shanghai Composite Index is undergoing a correction that should find support at 3200. Bearish divergence on the Trend Index, and a cross below zero for the first time since May 2016, warn of continued selling pressure.

Shanghai Composite Index

India’s NSE Nifty Index continues to test support at 10000 after a weak correction. Twiggs Trend Index respecting zero signals strong buying pressure. Recovery above 10500 is likely and would indicate another primary advance.

Nifty Index

Target 10500 + ( 10500 – 10000 ) = 11000

Europe is weaker despite strong manufacturing signals. Dow Jones Euro Stoxx 50 found support at 3520 but the Trend Index is declining, warning of selling pressure. Breach of 3520 is likely and would warn of a test of primary support at 3400.

DJ Euro Stoxx 50

The Footsie remains volatile, with the index headed for another test of stubborn resistance at 7600. But Trend Index is declining and continues to warn of selling pressure.
FTSE 100

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

S&P 500

The Nasdaq 100 also continues a strong bull market, with the big five tech stocks (Apple, Amazon, Alphabet, Microsoft and Facebook) all recording solid gains.

Nasdaq 100

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

East to West: Seoul and Footsie find support

A Twiggs Money Flow trough high above zero reflects strong buying support on the Seoul Composite Index. Breach of support at 2300 is unlikely but would signal a primary down-trend.

Seoul Composite Index

Japan’s Nikkei 225 Index broke resistance at 20200, signaling another advance.

Nikkei 225 Index

Hong Kong’s Hang Seng Index has been in a strong bull market since breaking resistance at 24000 early this year.

Hang Seng Index

India’s NSE Nifty Index displays strong buying pressure, with Twiggs Money Flow oscillating above the zero line. Breakout above resistance at 10000/10100 is likely and would signal another advance.

Nifty Index

Target 10000 + ( 10000 – 9000 ) = 11000

Moving to Europe, Dow Jones Euro Stoxx 50 is headed for a test of resistance at 3650. A big Twiggs Money Flow trough above zero signals buying pressure. Breakout is likely and would offer a target of 3900*.

DJ Euro Stoxx 50

* Target calculation: 3650 + ( 3650 – 3400 ) = 3900

The UK’s Footsie is rallying strongly after a bear trap at 7300. Often the strongest bull signals start with a bear trap or false break through support. breakout above 7550 would offer a target of 7900*.

FTSE 100

* Target calculation: 7550 + ( 7550 – 7200 ) = 7900

East to West: Seoul selling pressure

Declining peaks on Twiggs Trend Index and a tall shadow on this week’s candle warn of selling pressure on the Seoul Composite Index. Breach of support at 2300 would signal a primary down-trend.

Seoul Composite Index

Most other exchanges remain bullish, with Japan’s Nikkei 225 Index breaking resistance at 20200. Expect retracement to test the new support level. Respect would signal a fresh advance.

Nikkei 225 Index

China’s Shanghai Composite Index is retracing to test its new support level at 3300. Declining peaks on the Trend Index warn of medium-term selling pressure. Respect of support would confirm a primary advance.

Shanghai Composite Index

India’s NSE Nifty Index respected resistance at 10000/10100 and declining peaks on Twiggs Trend Index warn of medium-term selling pressure. Follow-through below the rising trendline would warn of a correction.

Nifty Index

Target 10000 + ( 10000 – 9000 ) = 11000

Moving to Europe, Germany’s DAX consolidated ahead of the elections. The Trend Index trough at zero indicates buying pressure and a test of 13000 is likely.

DJ Euro Stoxx 600

The UK’s Footsie retraced to test its new resistance level at 7300. Respect would confirm a primary down-trend. Declining Twiggs Trend Index peaks, especially below zero, signal selling pressure. Follow-through below 7100 would strengthen the bear signal.

FTSE 100

East to West

First, the canary in the coal mine, the Seoul Composite Index, found support at 2300. Follow-through above 2400 would be a bullish sign, suggesting a fresh advance.

Seoul Composite Index

Japan’s Nikkei 225 Index found support despite ICBMs flying overhead, rallying to test resistance at 20000. Recovery above 20000 is likely and would signal a fresh advance.

Nikkei 225 Index

China’s Shanghai Composite Index is retracing to test its new support level at 3300. Respect is likely and would confirm a fresh advance.

Shanghai Composite Index

India’s NSE Nifty Index is testing resistance at 10000/10100. 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

Moving to Europe, Germany’s DAX rallied off support at 12000, suggesting a fresh advance. Recovery of the Trend Index above zero is bullish. Breakout above 13000 would signal another primary advance.

DJ Euro Stoxx 600

The UK’s Footsie, however, broke support at 7300 on the back of BREXIT worries, warning of a primary down-trend. Twiggs Trend Index peaks below zero signal selling pressure. Follow-through below 7100 would confirm a bear market.

FTSE 100

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

Global correction

Global stock markets have mostly experienced selling pressure over the last two weeks but most of the activity is secondary in nature and, apart from longer-term issues in the UK and Canada, is unlikely to affect the primary up-trend.

Starting near the North Korean epicenter of the latest tensions, the Seoul Composite Index is largely unfazed. The monthly chart reflects a secondary correction with moderate selling pressure and no hint of panic selling.

Seoul Composite Index

China’s Shanghai Composite Index rallied after a modest correction.

Shanghai Composite Index

While bearish divergence on Hong Kong’s Hang Seng Index warns of selling pressure and a secondary correction to test 26000.

Hang Seng Index

India’s Sensex is undergoing a correction after breaking its rising trendline but found support at 31000.

BSE Sensex

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

TSX 60

Europe also experienced selling pressure, with the Footsie testing primary support at 7300. Breach of support would signal a primary down-trend.

FTSE 100

Germany’s Dax found support at 12000. Respect, with a Twiggs Money Flow trough above zero, would indicate another primary advance.

DJ Euro Stoxx 50

Selling pressure surges around the globe

Canada’s TSX 60 fell sharply this week. Twiggs Trend Index below zero warns of long-term selling pressure. Breach of support at 880 would confirm a primary down-trend.

TSX 60

In the UK, the Footsie is testing primary support at 7300. Twiggs Trend Index below zero again warns of long-term selling pressure. Breach of support would signal a primary down-trend.

FTSE 100

Dow Jones Euro Stoxx 50 is testing long-term support at 3400. Twiggs Trend Index, again below zero, warns of long-term selling pressure

DJ Euro Stoxx 50

India’s Sensex is undergoing a correction after breaking its rising trendline and support at 31500. Expect strong support at 29000.

BSE Sensex

China’s Shanghai Composite Index is also testing support. Breach of 3200 would warn of another test of primary support at 3000.

Shanghai Composite Index

Around the markets: Hong Kong & India bullish

Canada’s TSX 60 continues to test resistance at the former primary support level of 900. Bearish divergence on Twiggs Money Flow warns of strong selling pressure. Decline below 880 would confirm a primary down-trend, with an initial target of 865*.

TSX 60 Index

* Target calculation: 900 – ( 935 – 900 ) = 865

The Footsie recovered above 7400 but bearish divergence on Twiggs Money Flow warns of long-term selling pressure. Another test of primary support at 7100 remains likely.

FTSE 100 Index

European stocks are taking a beating, with the Dow Jones Euro Stoxx 50 Index testing support at 3400. Sharp decline on Twiggs Money Flow warns of selling pressure. Breach of 3400 would warn of a test of 3200.

DJ Euro Stoxx 50 Index

* Target calculation: 3650 – ( 3650 – 3450 ) = 3850

India’s Sensex remains in a bull market.

BSE Sensex

* Target calculation: 29000 + ( 29000 – 26000 ) = 32000

As does Hong Kong’s Hang Seng Index.

Hang Seng Index

* Target calculation: 24000 – ( 24000 – 21500 ) = 26500

While China’s Shanghai Composite index ranges between 3000 and 3300. Government interference remains a concern.

Shanghai Composite Index

Round the world: India & Hong Kong advance, Canada falters

Canada’s TSX 60 retraced to test resistance at the former primary support level of 900. Respect is likely and would signal a bear market. Decline of Twiggs Money Flow/Trend Index below zero would strengthen the bear signal. Medium-term target for the decline is 865*.

TSX 60 Index

* Target calculation: 900 – ( 935 – 900 ) = 865

The Footsie is losing momentum, with penetration of successive trendlines and declining Twiggs Trend Index. A test of primary support at 7100 is likely.

FTSE 100 Index

Dow Jones Euro Stoxx 50 Index, representing the 50 largest stocks in the Euro Zone, found support above 3400. Penetration of the declining trendline would indicate the correction is over and suggest the start of another advance — confirmed if the index breaks its recent (May 2017) high.

DJ Euro Stoxx 50 Index

* Target calculation: 3650 – ( 3650 – 3450 ) = 3850

It’s full steam ahead for India’s Sensex. Trend Index troughs above zero indicate strong buying pressure. Expect some profit-taking at the target of 32000* but any correction is likely to be shallow as the bull market gathers momentum.

BSE Sensex

* Target calculation: 29000 + ( 29000 – 26000 ) = 32000

Hong Kong’s Hang Seng Index has also reached its target of 26500. Again Trend Index troughs above zero indicate solid buying pressure.

Hang Seng Index

* Target calculation: 24000 – ( 24000 – 21500 ) = 26500

China’s Shanghai Composite index is also rallying but I remain wary of government intervention.

Shanghai Composite Index

Footsie falters

Sterling continues to test primary support at 1.13 against the Euro. Twiggs Trend Index peaking below zero warns of selling pressure. Breach of support is likely and would signal a test of the 2016 low at €1.10.

GBPEUR

The FTSE 100 breached medium-term support at 7400 and the long-term rising trendline, warning that momentum is slowing. Bearish divergence on Twiggs Trend Index warns of rising selling pressure. Test of primary support at 7100 is likely.

FTSE 100

* Target: 7400 + ( 7400 – 7100 ) = 7700

Footsie hesitates as Sterling tests support

Brexit uncertainty is likely to continue for an extended period, with Sterling testing primary support at 1.13 against the Euro. Breach would signal a test of the 2016 low at 1.10.

GBPEUR

The FTSE 100 retraced to test support at 7400, with bearish divergence on Twiggs Money Flow indicating medium-term selling pressure. Respect would confirm the target of 7700*. But breach of the rising trendline is as likely, and would warn of a test of primary support at 7100.

FTSE 100

* Target: 7400 + ( 7400 – 7100 ) = 7700

Footsie stalls, Sterling weakens

Political uncertainty, with a hung parliament, increased downward pressure on Sterling which is testing primary support at 1.13/1.14 against the Euro. Breach would signal a test of the 2016 low at 1.10.

GBPEUR

The FTSE 100 stalled at 7600, with bearish divergence on Twiggs Money Flow indicating medium-term selling pressure. Retracement that respects support at 7400 would re-affirm the target of 7700*. But breach of the rising trendline is as likely, which would warn of a test of primary support at 7100.

FTSE 100

* Target: 7400 + ( 7400 – 7100 ) = 7700

Footsie stalls as Pound weakens

Sterling continues to test primary support at 1.140 Euro. Breach would signal a decline to the 2016 low at 1.100.

GBPEUR

The FTSE 100 advance stalled, signaled by a doji on the weekly chart, with bearish divergence on Twiggs Money Flow indicating medium-term selling pressure. Retracement that respects support at 7400 would re-affirm the target of 7700*.

FTSE 100

* Target: 7400 + ( 7400 – 7100 ) = 7700