Stocks bullish but India threatens reversal
By Colin Twiggs
April 30th, 2015 7:30 p.m. AET (3:30 a.m. EDT)
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Market Insight
India's Sensex is testing primary support at 27000 with 13-week Twiggs Money Flow below zero warning of a reversal. Breach of primary support would signal a primary down-trend; follow-through below 26500 would confirm. Recovery above 29000, however, would suggest that this is simply a mid-point consolidation below 30000.
Apart from India, Asia and North America are bullish. But concerns over Greece weigh on Europe. Australia continues a tentative advance.
North America
The S&P 500 is hesitating at the 2120 resistance level, upper border of a bullish ascending triangle. But long tails on the last two candles indicate support at 2100, a bullish sign. Breakout would confirm an advance to 2200*. 21-Day Twiggs Money Flow has leveled off after the recent decline. Recovery would form a large trough above zero, another bullish sign. Penetration of the rising trendline is less likely, but would warn of a correction.
* Target calculation: 2120 + ( 2120 - 2040 ) = 2200
Same as usual. CBOE Volatility Index (VIX) indicates low risk typical of a bull market.
Canada's TSX 60 continues to test long-term resistance at 900. Narrow consolidation above 890 is a bullish sign. 13-Week Twiggs Momentum holding above zero also suggests a primary up-trend.
* Target calculation: 900 + ( 900 - 800 ) = 1000
Europe
Germany's DAX is undergoing a correction, likely to test support at 11000 and the primary trendline. Declining 13-week Twiggs Money Flow suggests medium-term selling pressure.
The Footsie is testing support at 6950/7000. Breach would warn of a correction with initial support at 6700. Declining 13-week Twiggs Money Flow similarly indicates medium-term selling pressure. Respect of the rising trendline at 6950 is unlikely, but would be a bullish sign, signaling a fresh advance.
* Target calculation: 7000 + ( 7000 - 6000 ) = 8000
Asia
A monthly chart shows the extent of the Shanghai Composite's exponential rise. Rising 13-week Twiggs Money Flow indicates buying pressure. Skyrocketing margin lending does not indicate a reversal, but does warn of fragility.
* Target calculation: 3500 + ( 3500 - 2500 ) = 4500
Japan's Nikkei 225 Index continues to test the new support level at 19500/20000. Declining 13-week Twiggs Money Flow indicates medium-term selling pressure. Respect would indicate an advance to 21000 and a long-term target of 22000*. Penetration of the rising trendline is unlikely.
* Target calculation: 20000 + ( 20000 - 18000 ) = 22000
Australia
The ASX 200 is testing 5750. A long tail on today's daily candle indicates a fair measure of support. Decline on 13-week Twiggs Money Flow is also mild. Respect of 5750 would indicate another test of 6000. Breakout above 6000 would offer a target of 6250*. Breach of support at 5650, the September peak, is unlikely, but warn of a strong correction.
* Target calculation: 6000 + ( 6000 - 5750 ) = 6250
There are decades where nothing happens; and there are weeks where decades happen.
~ Vladimir Ilyich Lenin
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