Asia steadies

China’s Shanghai Composite Index steadied and is again testing resistance at 3100. Breakout would signal a primary up-trend. Rising troughs on Twiggs Money Flow indicate buying pressure.

Shanghai Composite Index

Japan’s Nikkei 225 Index rallied for another test of resistance at 17000. Breakout above 17000 would suggest a primary up-trend. Follow-through above 17600, completing a broad double-bottom, would confirm. Further consolidation, however, is more likely.

Nikkei 225 Index

India’s BSE Sensex broke out of its narrow rectangle at 28000, signaling another advance. Expect a test of the 2015 high at 30000. Bearish divergence on Twiggs Money Flow now appears misleading.


China invades India (1962): JFK’s finest hour

…..on October 22, President John F. Kennedy announced to the nation that Soviet missiles had been discovered in Cuba….. What the president did not discuss with the American public was that, two days prior, Chinese forces attacked Indian forces along a disputed Himalayan border between the countries.

Bruce Riedel from the Brookings Institute discusses newly-declassified evidence that Indian Prime Minister Jawaharlal Nehru asked President Kennedy to use American air power.

India threatens reversal

India’s Sensex is testing primary support at 26500. Breach would signal a primary down-trend, confirming the signals from 13-week Twiggs Momentum & Money Flow, both of which have crossed below zero. Twiggs Momentum has been warning of a reversal with a bearish divergence since late 2014, while Twiggs Money Flow chimed in from March 2015. Breach of support would offer a target of 23000. Recovery above the descending trendline is unlikely, but would suggest another rally.



* Target calculation: 26500 – ( 30000 – 26500 ) = 23000

The S&P/NSE Nifty index tells a similar story, testing primary support at 8000. Breach would offer a target of 7000*.


* Target calculation: 8000 – ( 9000 – 8000 ) = 7000

India: Sensex advance

India will also benefit from lower oil prices. The BSE Sensex broke resistance at 29000, signaling a primary advance to 31000*. Rising 13-week Twiggs Money Flow troughs above zero signal strong, long-term buying pressure. Retracement to test the new support level at 29000 is a possibility, but breach of support is unlikely.


* Target calculation: 29000 + ( 29000 – 27000 ) = 31000

Cut in Europe Bank Lending Has Wide Impact –

European banks in recent years dramatically boosted lending to emerging markets and were among the biggest cross-border lenders in these countries. Their retreat has tightened credit in industries—from aircraft to media to mining — squeezing economies already feeling the effects of reduced demand from the developed world for their exports….”We’re in a very vulnerable position that’s definitely impacting global growth,” Gail Kelly, chief executive of Australia’s Westpac Bank said at The Wall Street Journal CEO Council last week. “It’s certainly impacting in my country and in Asia.”

via Cut in Europe Bank Lending Has Wide Impact –

The End of Population Growth – Sanjeev Sanyal – Project Syndicate

What demographers call the Total Fertility Rate is the average number of live births per woman over her lifetime. In the long run, a population is said to be stable if the TFR is at the replacement rate, which is a little above 2.3 for the world as a whole, and somewhat lower, at 2.1, for developed countries, reflecting their lower infant-mortality rates.

The TFR for most developed countries now stands well below replacement levels. The OECD average is at around 1.74, but some countries, including Germany and Japan, produce less than 1.4 children per woman. However, the biggest TFR declines in recent years have been in developing countries. The TFR in China and India was 6.1 and 5.9, respectively, in 1950. It now stands at 1.8 in China, owing to the authorities’ aggressive one-child policy, while rapid urbanization and changing social attitudes have brought down India’s TFR to 2.6.

…. it is likely that world population will peak at nine billion in the 2050’s, a half-century sooner than generally anticipated, followed a sharp decline. One could argue that this is a good thing, in view of the planet’s limited carrying capacity. But, when demographic dynamics turn, the world will have to confront a different set of problems.

via The End of Population Growth – Sanjeev Sanyal – Project Syndicate.

India Singapore selling pressure

Dow  Jones Total Stock Market (TSM) India Index is testing resistance at 1825. 21-Day Twiggs Money Flow mostly below zero warns of medium-term selling pressure. Expect resistance to hold followed by another test of support at 1650.


* Target calculation: 1650 – ( 1800 – 1650 ) = 1500

The weekly SENSEX chart shows a similar story: the index retracing to test resistance at 17500, but 13-week Twiggs Money Flow below zero warning of strong selling pressure. Reversal below 16000 would offer a target of 14500*.


* Target calculation: 16000 – ( 17500 – 16000 ) = 14500

Dow Jones Singapore Index retreated Monday. 21-Day Twiggs Money Flow below zero warns of medium-term selling pressure. Failure of support is likely and would offer a target of 200*.

DJ Singapore Index

* Target calculation: 220 – ( 240 – 220 ) = 200

India, Singapore weaken

Dow Jones India 30 Titans Index is headed for another test of support at 152. 21-Day Twiggs Money Flow holding below zero indicates selling pressure. Failure of support would warn of a down-swing to 136*.

Dow Jones India 30 Titans

* Target calculation: 152 – ( 168 – 152 ) = 136

Dow Jones Singapore Index is testing the band of support between 220 and 215. Low volume indicates weak support. Failure of 215 would offer a target of 200*.

Dow Jones Singapore

* Target calculation: 220 – ( 240 – 220 ) = 200

India Singapore short-term buying

The DJ Total Stock Market (formerly DJ Wilshire) Index for India ($DWIN) gapped down on Monday’s open but closed with a long tail. Short-term buying is unlikely to withstand concerted selling pressure, signaled by 13-week Twiggs Money Flow below zero.

Dow Jones Industrial Average

* Target calculation: 1820 – ( 1980 – 1820 ) = 1660

DJ Singapore also closed with a long tail, indicating short-term buying support — confirmed by higher volume. Again this is unlikely to withstand long-term selling pressure for more than a few days.

Dow Jones Industrial Average

* Target calculation: 220 – ( 240 – 220 ) = 200