S&P 500 and DJ Europe

The S&P 500 index is headed for medium-term support at 1160. 21-Day Twiggs Money Flow warns of (medium-term) selling pressure. If support at 1160 fails, primary support at 1075/1100 is unlikely to hold — offering a target of 900*. Reversal below the rising trendline on 63-day Twiggs Momentum would indicate continuation of the primary down-trend.

S&P 500 Index

* Target calculation: 1100 – ( 1300 – 1100 ) = 900

Dow Jones Europe index is also headed for primary support, at 205. Failure is likely and would offer a target of 160*. Reversal of 13-week Twiggs Money Flow below zero would warn of rising selling pressure.

Dow Jones Europe Index

* Target calculation: 210 – ( 260 – 210 ) = 160

Canada TSX 60

Respect of the descending trendline on Canada’s TSX 60 weekly chart indicates another test of primary support at 645. Failure would signal a primary decline to 575*. Breach of the zero line by 63-day Twiggs Money Flow would warn of rising selling pressure. Breakout above resistance at 715 is unlikely but would flag that the primary down-trend has ended.

TSX 60 Index

* Target calculation: 645 – ( 715 – 645 ) = 575

China weakens

Dow Jones Shanghai Index respected resistance at 320 and is now testing support at 285. Failure would offer a target of 260*. 63-Day Twiggs Momentum deep below zero continues to signal a strong primary down-trend.

Dow Jones Shanghai Index

* Target calculation: 290 – ( 320 – 290 ) = 260

DJ Hong Kong index is testing medium-term support at 360. Failure would mean a re-test of the primary level at 320; respect is less likely but would indicate another test of 410. Declining 13-week Twiggs Money Flow below zero warns of selling pressure.

Dow Jones Hong Kong Index

Commodities

CRB Commodities Index is headed for another test of the descending trendline. Upward breakout would be a bullish sign, indicating that the down-trend is weakening — especially if accompanied by a 63-day Twiggs Momentum cross to above zero. Reversal below primary support at 293, on the other hand, would signal another decline with a target of 265*.

CRB Commodities Index

* Target calculation: 295 – ( 325 – 295 ) = 265

India warns of primary decline, Singapore may follow

India’s SENSEX broke through support at 15800/16000, signaling a primary decline to 14000*. Reversal of 13-week Twiggs Money Flow below zero confirms strong selling pressure. The index later recovered above 16000 Monday; we will have to wait to see whether the new support level holds.

BSE SENSEX Index

* Target calculation: 16 – ( 18 – 16 ) =14

The monthly chart shows Singapore’s Straits Times Index headed for a test of primary support at 2500. Long-term bearish divergence on 63-day Twiggs Momentum indicates a primary down-trend. Failure of support would signal a primary decline to 2100*.

Straits Times Index

* Target calculation: 2500 – ( 2900 – 2500 ) = 2100

S&P 500 breaks 1200

The S&P 500 index broke medium-term support at 1200 and is headed for a test of the primary level at 1100. Failure would offer a target of 900*. The 63-day Twiggs Momentum peak below zero warns of a primary down-trend.

S&P 500 Index

* Target calculation: 1100 – ( 1300 – 1100 ) = 900

NASDAQ 100 index is similarly headed for the band of primary support between 2000 and 2050. Bearish divergence on 13-week Twiggs Money Flow warns of strong selling pressure. failure of support would signal a primary decline to 1600*.

Nasdaq 100 Index

* Target calculation: 2000 – ( 2400 – 2000 ) = 1600

Dow Jones Industrial Average monthly chart shows the index testing medium-term support at 11000. The 63-day Twiggs Momentum peak below zero again warns of a primary down-trend. Breach of support would test the primary level at 10400; and failure of that level would remove any doubt regarding a bear market.

Dow Jones Industrial Average

* Target calculation: 10400 – ( 12300 – 10400 ) = 8500

Euro approaches key support

The euro is headed for a test of primary support at $1.32.  The peak below zero on 63-day Twiggs Momentum indicates a strong primary down-trend. Failure of support would offer a target of $1.22*.

EURUSD

* Target calculation: 1.32 – ( 1.42 – 1.32 ) = 1.22

Commodities drag Aussie and Canadian dollar lower

Commodities are weakening and dragging the Aussie and Loonie lower. The Aussie dollar shows a similar iceberg pattern on 63-day Twiggs Momentum, warning of a primary down-trend. Breakout below primary support at $0.94 would offer a long-term target of $0.80*.

AUDUSD

* Target calculation: 0.94 – ( 1.08 – 0.94 ) = 0.80

Canada’s Loonie is also headed for a test of $0.94 against the greenback. The peak below zero on 63-day Twiggs Momentum indicates a strong down-trend. Failure of primary support (0.94) would offer a target of $0.87*.

CADUSD

* Target calculation: 0.94 – ( 1.01 – 0.94 ) = 0.87

Commodities and Crude Oil

Brent Crude is testing medium-term support at $105/barrel. Failure is likely if the dollar continues to strengthen and would mean a test of the $99/$100 primary level. Reversal of 63-day Twiggs Momentum below -5% would complete an iceberg pattern, indicating a solid primary down-trend. Breach of primary support would offer a target of $85/barrel*.

Brent Crude Afternoon Markers

* Target calculation: 100 – ( 115 – 100 ) = 85

Roughly only 10% of an iceberg is visible at sea, with most of the ice-mass hidden below the water-line. Similarly, an “iceberg” pattern on a chart describes a situation where +/- 90% of Twiggs Momentum (or a similar indicator) is below zero with only a small peak protruding above. 

CRB Commodities Index is similarly headed for a test of primary support, at 295. 63-Day Twiggs Momentum deep below zero indicates a strong primary down-trend. Failure of support would offer a target of 265*.

CRB Commodities Index

* Target calculation: 295 – ( 325 – 295 ) = 265

That would have a negative impact on the Aussie Dollar and Canadian Loonie which closely track commodity prices.

Europe warns of another decline

Dow Jones Europe Index is headed for a test of the band of support between 200 and 205. A 63-day Twiggs Momentum peak below zero would warn of a strong primary down-trend. Failure of primary support would offer a target of 150*.

Dow Jones Europe Index

* Target calculation: 205 – ( 260 – 205 ) = 150

Singapore Straits Times Index & Indian Sensex

The Straits Times Index broke through 2700, warning of another primary down-swing. The decline of 63-day Twiggs Momentum below zero indicates a primary down-trend. Target for the initial down-swing is 2100*.

Straits Times Index

* Target calculation: 2500 – ( 2900 – 2500 ) = 2100

India’s BSE Sensex Index broke the band of primary support at 15800 to 16000, warning of a decline to 14000*. Repeated peaks below zero on 63-day Twiggs Momentum indicate a strong primary down-trend.

BSE Sensex Index

* Target calculation: 16 – ( 18 – 16 ) = 14

TSX 60 warns of another decline

Canada’s TSX 60 index broke medium-term support — at 680 on the weekly chart below. Respect of the descending trendline suggests another decline. Failure of primary support at 650 would confirm. 63-Day Twiggs Momentum deep below zero also indicates a strong primary down-trend. A conservative target for the decline would be 580*.

TSX 60 Index

* Target calculation: 650 − ( 720 − 650 ) = 580

Nasdaq, Dow warn of correction

The NASDAQ 100 index broke support at 2300 on the weekly chart, warning of a correction to test primary support at 2000. A large bearish divergence on 13-week Twiggs Money Flow now warns of a primary down-trend; reversal below zero would strengthen the signal. Failure of support at 2000 would confirm.

Nasdaq 100 Index

* Target calculation: 2000 – ( 2400 – 2000 ) = 1600

Dow Jones Industrial Average broke out below its recent pennant, warning of another test of primary support at 10600. Breach of support at 11600 would confirm the signal. Reversal of 63-day Twiggs Momentum below its recent lows (-4%) would complete an “iceberg” — with the indicator just peaking above the zero line — indicating a primary down-trend.

Dow Jones Industrial Average

* Target calculation: 10600 – ( 12200 – 10600 ) = 9000

Aussie and Loonie test support

The Aussie is testing support at parity against the greenback. The “iceberg” on 63-day Twiggs Momentum indicates a primary down-trend. Failure of parity would test primary support at $0.94 and, in the long-term, breach of primary support would signal a decline to $0.80*.

AUDUSD

* Target calculation: 0.94 – ( 1.08 – 0.94 ) = 0.80

63-Day Twiggs Momentum indicates a stronger down-trend on Canada’s Loonie. Failure of support at $0.975 would test primary support at $0.94 and, in the long-term, breach of the $0.94 level would signal decline to $0.80*.

CADUSD

* Target calculation: 0.94 – ( 1.01 – 0.94 ) = 0.87

The Aussie and Loonie normally move in sympathy with the CRB Commodities Index and a CRB break of its primary down-trend would warn of a reversal on the above two currencies.

Euro drags sterling lower

The euro broke support at $1.36 and is headed for a test of primary support at $1.32. Respect of zero by 63-day Twiggs Momentum signals a strong down-trend. Failure of support would signal a decline to $1.22*.

EURUSD

* Target calculation: 1.32 – ( 1.42 – 1.32 ) = 1.22

The pound is also retracing, to test primary support at $1.53. 63-Day Twiggs Momentum indicates a strong down-trend. Failure of support would signal a decline to $1.45*.

GBPUSD

* Target calculation: 1.53 – ( 1.61 – 1.53 ) = 1.45

Commodities and crude

The CRB Commodities Index remains in a primary down-trend. Respect of the descending trendline, with reversal below 315, would warn of another decline. Breakout above the descending trendline is less likely, but would indicate that the down-trend is weakening. 63-Day Twiggs Momentum penetrated its descending trendline but remains below zero, suggesting that the down-trend has slowed but not reversed.

CRB Commodities Index

* Target calculation: 295 – ( 325 – 295 ) = 265

Copper rallied to test its descending trendline at $8000/tonne. 63-Day Twiggs Momentum deep below zero indicates a strong primary down-trend. Breakout above $8000 would indicate that the down-trend is weakening, while respect of the descending trendline would warn of a decline to 6000*.

Copper Grade A

* Target calculation: 7000 – ( 8000 – 7000 ) = 6000

Brent Crude broke out above its trend channel, indicating that it is forming a base above $100/barrel. 63-Day Twiggs Momentum recovered above zero to confirm the breakout. Expect retracement to test primary support at $100, but respect is now likely and would suggest a primary up-trend.

Brent Crude Afternoon Markers

* Target calculation: 5600 – ( 6600 – 5600 ) = 5100

Nymex WTI crude is rising sharply, closing the divergence from Brent crude. News of the Seaway pipeline reversal that will relieve congestion at the Cushing, Oklahoma hub sent crude futures soaring. Expect a short retracement followed by an advance to $115.

Nymex WTI Crude

Conclusion: Commodities remain in a primary down-trend caused by the strengthening dollar. Brent crude is forming a bottom, but rising crude prices are likely to dash hopes of an early economic recovery. Falling commodity prices should cause sympathetic weakening of the Australian Dollar and Canadian Loonie.

India & Singapore

The BSE Sensex found support at 17000, rallying to 17300 Monday. Breakout above 18000 would offer a target of 19000 — and breach of the descending trendline would warn that the primary down-trend is weakening. Reversal below 17000 remains as likely, however, and would test primary support at 16000. Twiggs Money Flow oscillating close to zero indicates uncertainty.

BSE Sensex Index

* Target calculation: 18 + ( 18 – 17 ) = 19

Singapore’s Straits Times Index found medium-term support at 2750 last week before rallying to 2840 Monday. 63-Day Twiggs Momentum deep below zero continues to indicate a primary down-trend. Failure of support at 2750 would test primary support at 2500, while breakout above 2900 would offer a target of 3200*.

Singapore Straits Times Index

* Target calculation: 2900 + ( 2900 – 2600 ) = 3200

Canada TSX 60

Canada’s TSX 60 index is consolidating between 680 and 720. Upward breakout would penetrate the descending trendline, indicating that the primary down-trend is weakening. A 13-week Twiggs Money Flow trough that respects the zero line would signal a primary up-trend. Reversal below 680, however, would warn of another test of primary support at 620.

TSX 60 Index

* Target calculation: 720 + ( 720 – 680 ) = 760