Asia: Japan rises as gold falls

Japan’s Nikkei 225 index is in a strong primary up-trend as the BOJ commences asset purchases on a massive scale. This is a tectonic shift in the market. Larry Edelson (as quoted by Barry Ritholz) has the most convincing explanation of the sharp fall in gold:

The wicked and aggressive devaluation of the Japanese yen is setting off a massive stampede OUT of gold and into cash and other assets…….Why are the Japanese dumping gold, especially when their currency is being devalued? It’s simple. The fall in the Japanese yen caused the price of gold in yen to spike sharply higher. So Japanese investors are cashing in their profits.

…and buying stocks.

* Target calculation: 11500 + ( 11500 – 8500 ) = 14500

India’s Sensex corrected to support at 18000; breakout would warn that momentum is failing and a test of primary support at 16000 likely. Bearish divergence on 13-week Twiggs Money Flow warns of a (primary trend) reversal.

China’s Shanghai Composite Index is testing medium-term support at 2150. Rising 13-week Twiggs Momentum suggests a bottom is forming, but that does not rule out another test of primary support at 1950/2000. Respect of 2150, however, with breach of the descending trendline, would be a bullish sign suggesting an inverse head-and-shoulders reversal.

Asia tentative

Dow Jones Japan Index was tentative Monday, the inside day indicating hesitancy. Recovery above 70.50 would signal continuation of the primary advance, while penetration of the rising trendline would warn of a correction.

Dow Jones Hong Kong Index met resistance at its former support level. The Hang Seng Index is testing medium-term support at 22000. Failure appears likely and would test primary support — and the rising trendline — at 21000.

The Shanghai Composite Index found support at 2250 for the third week in a row. Rising 13-week Twiggs Money Flow indicates buying pressure. Respect of support would be a bullish sign: a shallow trough followed by breakout above 2450 would signal a primary up-trend. Failure of support, while less likely, would test primary support at 1950/2000.

* Target calculation: 2450 + ( 2450 – 2250 ) = 2650

India rallied Monday, but failure of support at 18800 would test the primary level at 18000.  Declining 13-week Twiggs Money Flow continues to warn of selling pressure. Failure of 18000 would indicate a primary trend reversal.

Asia finds relief

Japan found relief from the overnight selling. Dow Jones Japan Index is back testing resistance at 70. Breakout would signal continuation of the primary advance.

Dow Jones Hong Kong Index is undergoing a correction but found support at yesterday’s low of 464.

India is falling today. The Sensex is likely to re-test support at 18800. Breakout above 20200 would signal a primary advance to 21000*, but bearish divergence on 13-week Twiggs Money Flow continues to warn of selling pressure. Reversal below 19000 would warn of a correction to the primary trendline at 18000. Failure of 18800 would confirm.

* Target calculation: 20 + ( 20 – 19 ) = 21

China is neutral Tuesday, but the Shanghai Composite broke support at 2250 on Monday, warning of a down-swing to primary support at 1950/2000.

* Target calculation: 2450 + ( 2450 – 2250 ) = 2650

Asia finds support

Japan’s Nikkei 225 Index broke through its medium-term target of 12000. Selling pressure failed to materialize and the index is headed for its long-term target of 14000*.

* Target calculation: 11000 + ( 11000 – 8000 ) = 14000

India’s Sensex found support at 18800. Penetration of the declining trendline indicates a rally to 20200. Breakout would signal a primary advance to 21000*, but bearish divergence continues to warn of selling pressure. Reversal below 19000 would warn of a correction to the primary trendline at 18000.

* Target calculation: 20 + ( 20 – 19 ) = 21

Singapore’s Straits Times Index continues to consolidate below resistance at 3300. Buying support at 3250 is evident from higher volume at the 3250 level. Breakout above 3300 would signal a fresh primary advance, with a long-term target of the 2007 high at 3900*.

* Target calculation: 3300 + ( 3300 – 2700 ) = 3900

Hong Kong’s Hang Seng Index correction found support at 22500. Declining 13-week Twiggs Momentum indicates selling pressure. Expect another test of 22500; failure would signal a test of the primary trendline at 21000.

* Target calculation: 22 + ( 22 – 18 ) = 26

China’s Shanghai Composite also found support, at 2250. Respect would indicate another test of resistance at 2450, while failure would indicate a down-swing to primary support at 1950/2000. Rising 13-week Twiggs Momentum suggests a primary up-trend; a trough above zero would strengthen the signal. Breakout above 2450 would confirm.

* Target calculation: 2450 + ( 2450 – 2250 ) = 2650

Asia: Japan advances while India & China retreat

Japan’s Nikkei 225 Index broke its 2010 high of 11500, indicating continuation of the primary advance to 12000*. Bearish divergence on 13-week Twiggs Money Flow warns of selling pressure. Expect a correction to test the new support levels at 11000, possibly 10000.

* Target calculation: 10000 + ( 10000 – 8000 ) = 12000

India’s Sensex broke support at 19000, warning of a correction to the primary trendline at 18000. The sharp fall on 13-week Twiggs Money Flow, following a bearish divergence, confirms strong selling pressure.

* Target calculation: 19 + ( 19 – 18 ) = 20

Singapore’s Straits Times Index retreated from resistance at 3300. Expect support at 3200; failure would warn of a correction. Another trough above zero on 13-week Twiggs Momentum would suggest that the primary up-trend is intact. Breakout above 3300 would offer a target of the 2007 high at 3900*.

* Target calculation: 3300 + ( 3300 – 2700 ) = 3900

Hong Kong’s Hang Seng Index correction is headed for a test of secondary support at 22000 but is still some way above the primary trendline — and support — at 21000. A 13-week Twiggs Momentum trough above zero would suggest a healthy primary up-trend.

* Target calculation: 22 + ( 22 – 18 ) = 26

China’s Shanghai Composite is also on the retreat, testing secondary support at 2250. Failure would indicate a down-swing to primary support at 1950/2000. Reversal of 13-week Twiggs Momentum trough below zero would warn of another primary decline, with a long-term target of 1500*.

* Target calculation: 2000 – ( 2500 – 2000 ) = 1500

Asia: India retreats while Japan and Singapore advance

India’s Sensex is headed for a test of support at 19000. Breach of the secondary trendline already warns of a correction to the primary trendline around 18000. Bearish divergence on 13-week Twiggs Money Flow, followed by reversal below zero, indicates strong selling pressure.

* Target calculation: 19 + ( 19 – 18 ) = 20

Singapore’s Straits Times Index is consolidating in a narrow range below 3300 — a bullish sign — and 21-day Twiggs Money Flow oscillating above zero indicates buying pressure. Breakout above 3300 would signal an advance to the 2007 high at 3900*. Reversal below 3250 is unlikely but would warn of a correction.

* Target calculation: 3300 + ( 3300 – 2700 ) = 3900

Japan’s Nikkei 225 Index is again testing its 2010 high of 11500. Reversal below 11000 would suggest a correction to 10000, while breakout would offer an initial target of 12000*.

* Target calculation: 10000 + ( 10000 – 8000 ) = 12000

Asia: India & Japan retreat

India’s Sensex displays a bearish divergence on 13-week Twiggs Money Flow, warning selling pressure. Breach of the secondary trendline — and medium-term support at 19500 — would indicate a correction to 18000.

* Target calculation: 19 + ( 19 – 18 ) = 20

Japan’s Nikkei 225 Index is retreating from its 2010 high of 11500 on the monthly chart. Reversal below 11000 would suggest a correction to 10000. Respect of support, however, would indicate a fresh primary advance.

* Target calculation: 11000 + ( 11000 – 8000 ) = 14000

China’s Shanghai Composite Index was closed last week for Chinese New Year.

Hong Kong’s Hang Seng Index re-opened Thursday, finding support at 23000.  Breakout above 24000 would test the 2010 high of 25000.  Troughs high above the zero line on 13-week Twiggs Money Flow indicate buying pressure. Reversal below 23000 is unlikely but would warn of a correction.

Asia: China near 1 year high

China’s Shanghai Composite Index is testing resistance at its 2012 high of 2460 on the daily chart. Rising 21-day Twiggs Money Flow indicates medium-term buying pressure. Breakout is likely and would signal a primary up-trend, but the index is overdue for a correction and a higher trough is required to confirm the reversal.

Hong Kong’s Hang Seng index already indicates a primary up-trend. Reversal below 23000, however, would warn of a correction.

India’s Sensex is testing its secondary rising trendline, while declining 13-week Twiggs Money Flow suggests selling pressure. Breach of the trendline would indicate a correction to test 18000/18200.

* Target calculation: 19 + ( 19 – 18 ) = 20

Singapore’s Straits Times Index is testing resistance at 3300. Rising 63-day Twiggs Momentum suggests continuation of the primary up-trend. Breakout would signal an advance to 3900*.

* Target calculation: 3300 + ( 3300 – 2700 ) = 3900

Japan’s Nikkei 225 Index retreated from its 2010 high of 11500. Reversal below 11000 would suggest a correction to 10000. Respect of support would indicate a breakout above 11500 — and a fresh primary advance.

* Target calculation: 11000 + ( 11000 – 8000 ) = 14000

Asia rallies

China’s Shanghai Composite Index is headed for a test of resistance at 2500. Crossover of 63-day Twiggs Momentum above zero — and breach of the declining trendline — suggest a primary up-trend. Breakout above 2500 would strengthen the signal. But only a higher trough followed by a new high on the index chart would confirm.

India’s Sensex retreated below 20000, while declining 13-week Twiggs Money Flow indicates medium-term selling pressure. Expect a correction to test support at 19000 but long-term buying pressure should ensure that the up-trend continues.

* Target calculation: 19 + ( 19 – 18 ) = 20

Singapore’s Straits Times Index is testing resistance at 3300. Rising 63-day Twiggs Momentum suggests continuation of the primary up-trend. Breakout would signal an advance to 3900*.

* Target calculation: 3300 + ( 3300 – 2700 ) = 3900

Japan’s Nikkei 225 Index is headed for its 2010 high at 11500. A spike in 13-week Twiggs Money Flow indicates strong buying pressure. Breakout is likely and would suggest a primary advance to 14500*.

* Target calculation: 11000 + ( 11000 – 8000 ) = 14000

Asia: China rally

China’s Shanghai Composite Index is testing resistance at 2150. While a large correction — signaled by breakout above 2150 — is not a reliable reversal signal, it does indicate that a bottom is forming. Bullish divergence on 63-day Twiggs Momentum also suggests a reversal. But only a higher trough followed by a new high on the index chart would confirm.

India’s Sensex is consolidating in a narrow range below 19500. Breakout is likely and would indicate an advance to 20000*. Oscillation of 13-week Twiggs Money Flow above zero indicates long-term buying pressure, but bearish divergence warns of medium-term resistance. Reversal below 19000 is unlikely but would warn that the advance is losing momentum.

* Target calculation: 19 + ( 19 – 18 ) = 20

Japan’s Nikkei 225 Index is advancing to resistance at 10000/10200*. Rising 63-day Twiggs Momentum indicates buying pressure; look for a trough above zero to confirm.

* Target calculation: 9200 + ( 9200 – 8200 ) = 10200

Asia: India strengthens

India’s Sensex broke through 19000 to confirm an advance to 20000*. Oscillation of 13-week Twiggs Money Flow above zero indicates long-term buying pressure.

* Target calculation: 19 + ( 19 – 18 ) = 20

Singapore’s Straits Times Index is testing resistance at 3100. Breakout would indicate a test of the upper trend channel at 3260*. Respect would test the lower channel at 2900. The 63-day Twiggs Momentum trough above zero suggests a primary advance.

* Target calculation: 3100 + ( 3100 – 2940 ) = 3260

Japan’s Nikkei 225 Index is retracing to test the new support level at 9200/9300. Respect would confirm an advance to 10200*. Rising 63-day Twiggs Momentum suggests a primary up-trend; look for a trough above zero to confirm.

* Target calculation: 9200 + ( 9200 – 8200 ) = 10200

Asia: India and Japan strengthen

India’s Sensex rallied off support at 18300. Troughs above zero on 13-week Twiggs Money Flow indicate long-term buying pressure. That and the mild correction suggest a strong primary up-trend. Breakout above 19000 would signal an advance to 20000*.

* Target calculation: 19 + ( 19 – 18 ) = 20

Singapore’s Straits Times Index found support at 2930. Breakout above 3100 would indicate a test of the upper trend channel, while reversal below support would test the lower channel. A 63-day Twiggs Momentum trough above zero would suggest an advance; below zero would reflect a ranging market.

* Target calculation: 3000 + ( 3000 – 2700 ) = 3300

Japan’s Nikkei 225 Index broke resistance at 9200/9300, signaling an advance to 10200*. Expect retracement to first test the new support level. Rising 13-week Twiggs Money Flow — above zero — indicates medium-term buying pressure.

* Target calculation: 9200 + ( 9200 – 8200 ) = 10200

South Korea’s Seoul Composite Index is ranging between 1760 and 2060. Expect another test of 2000. Breakout would indicate a primary up-trend, while respect would mean another test of support at 1860. Narrow oscillation of 63-day Twiggs Momentum around zero is typical of a ranging market.

Asia: India & China weaken

India’s Sensex broke support at 18500, warning of another correction. Troughs above zero on 13-week Twiggs Money Flow indicate long-term buying pressure; so the correction is likely to be mild. Respect of 18000 would suggest a strong primary up-trend, with an initial target of 20000*.

* Target calculation: 19 + ( 19 – 18 ) = 20

Singapore’s Straits Times Index broke support at 3000, warning of a correction. Expect support at the lower trend channel. Oscillation of 63-day Twiggs Momentum around zero would reflect a ranging market.

* Target calculation: 3000 + ( 3000 – 2700 ) = 3300

China’s Shanghai Composite Index is testing primary support at 2000. Breakout would offer a target of 1850*. Reversal of 13-week Twiggs Money Flow below zero warns of selling pressure. Recovery above 2150 is unlikely but would complete a double bottom reversal.

* Target calculation: 2000 – ( 2150 – 2000 ) = 1850

The Hang Seng Index is undergoing a correction. Breach of 21000 would indicate a test of 20000 and the rising trendline. Falling 13-week Twiggs Money Flow indicates medium-term selling pressure but the long-term picture remains bullish with, most likely, another trough above zero. Breakout above 22000 is unlikely at present but would signal an advance to 24000*.

* Target calculation: 22 + ( 22 – 20 ) = 24

Japan’s Nikkei 225 rallied to test resistance at 9200/9300. Rising 13-week Twiggs Money Flow indicates medium-term buying pressure. Breakout above 9300 would test 10200. Respect of resistance is unlikely but would suggest another test of primary support at 8200.

* Target calculation: 9200 + ( 9200 – 8200 ) = 10200

South Korea’s Seoul Composite Index found support at 1860; recovery above 1900 would suggest another test of 2000. A 13-week Twiggs Money Flow trough above zero would indicate long-term buying pressure. Recovery above 2000 would signal another primary advance.

Asia: India strong, China & Japan weaken

India’s Sensex continues to hold above 18500, suggesting a healthy up-trend. Rising troughs above zero on 13-week Twiggs Money Flow indicate buying pressure. Breakout above 19000 would signal an advance to 21000*.

* Target calculation: 18.5 + ( 18.5 – 16.0 ) = 21.0

Singapore’s Straits Times Index continues to test support at 3000. Breach of 2950 would test the lower trend channel, while breakout above 3100 would indicate an advance to 3300*. Oscillation of 63-day Twiggs Momentum around zero would reflect a ranging market.

* Target calculation: 3000 + ( 3000 – 2700 ) = 3300

Japan’s Nikkei 225 is headed for another test of medium-term support at 8450 after latest economic numbers warn of a contraction. Failure would test primary support at 8200. Oscillation of 13-week Twiggs Money Flow largely below zero indicates selling pressure. Breach of 8200 would signal a decline to 7200*.

* Target calculation: 8200 – ( 9200 – 8200 ) = 7200

South Korea’s Seoul Composite Index is testing medium-term support at 1880 but rising 13-week Twiggs Money Flow reflects buying pressure. Recovery above 1960 would test this year’s high at 2060.

China’s Dow Jones Shanghai Index is testing primary support at 250. Breakout would offer a target of 225*. Oscillation of 63-day Twiggs Momentum below zero reflects a primary down-trend.

* Target calculation: 250 – ( 275 – 250 ) = 225

Rising 13-week Twiggs Money Flow above zero indicates strong buying pressure on the Hang Seng Index. Breakout above 22000 would signal an advance to 24000*. A test of the rising trendline is still a possibility, but a correction that respects support at 20000 would still reflect a healthy up-trend.

* Target calculation: 22 + ( 22 – 20 ) = 24

Asia: India & Hong Kong strengthen

India’s Sensex respected support at 18500. Recovery above 19000 would confirm the primary advance to 21000*. Rising 13-week Twiggs Money Flow indicates strong buying pressure. Breach of support is now unlikely, but would warn of a test of primary support at 16500.

* Target calculation: 18.5 + ( 18.5 – 16.0 ) = 21.0

Singapore’s Straits Times Index continues an anemic up-trend, consolidating below 3100. Reversal below 3000 would test the lower edge of the trend channel. 63-Day Twiggs Momentum below zero would suggest further consolidation, while a fall below -5% would indicate a primary down-trend.

China’s Shanghai Composite Index continues to test resistance at 2150 (and the descending trendline). Reversal below support at 2000 would signal a decline to 1800*. But rising 13-week Twiggs Money Flow indicates medium-term buying pressure. Upward breakout would test 2250.

* Target calculation: 2150 – ( 2500 – 2150 ) = 1800

Hong Kong’s Hang Seng Index broke resistance at 22000, indicating a primary advance to 26000*. Rising 13-week Twiggs Money Flow indicates buying pressure, but wait for retracement to confirm the new support level.

* Target calculation: 22000 + ( 22000 – 18000 ) = 26000

Japan’s Nikkei 225 continues to test resistance at 9200. Breakout would indicate a rally to 10200. Rising 13-week Twiggs Money Flow indicates medium-term buying pressure. Respect of 9200, however, would indicate another test of primary support at 8500.

* Target calculation: 9200 + ( 9200 – 8200 ) = 10200

Asia: China & Japan weak, India & HK bullish

China’s Shanghai Composite Index respected resistance at 2150 and the descending trendline, indicating another down-swing. Breach of support at 2000 would confirm. Reversal of 63-day Twiggs Momentum below its rising trendline would strengthen the bear signal.

* Target calculation: 2150 – ( 2500 – 2150 ) = 1800

Rising 13-week Twiggs Money Flow indicates buying pressure on Hong Kong’s Hang Seng Index. Breakout above 22000 would indicate a primary advance with a long-term target of 26000*.

* Target calculation: 22 + ( 22 – 18 ) = 26

India’s Sensex continues to test its new support level at 18500. Recovery above 19000 would confirm the primary up-trend, while breach of support at 18000 would warn of a test of primary support at 16500. Rising 63-day Twiggs Momentum favors a primary advance.

* Target calculation: 18.5 + ( 18.5 – 16.0 ) = 21.0

Singapore’s Straits Times Index is in a weak up-trend, consolidating below 3100. Breach of support at 3000 would test the lower edge of the trend channel. Reversal of 63-day Twiggs Momentum below zero would suggest further consolidation, while a fall below -5% would indicate a primary down-trend.

Japan’s Nikkei 225 is testing resistance at 9200. Breakout would indicate a rally to 10200. Oscillation of 63-day Twiggs Momentum below zero, however, continues to indicate a down-trend. Respect of 9200 would indicate another test of primary support at 8500.

* Target calculation: 9200 + ( 9200 – 8200 ) = 10200

South Korea’s Seoul Composite index is testing support at 1900. Breach would warn of a correction to primary support at 1750. Reversal of 63-day Twiggs Momentum below zero would strengthen the bear signal.

Asian market update

China’s Shanghai Composite Index is testing medium-term resistance at 2150. Breach of the descending trendline would suggest that a bottom is forming. Bullish divergence on 63-day Twiggs Momentum also indicates that the down-trend is weakening.

* Target calculation: 2150 – ( 2500 – 2150 ) = 1800

India’s Sensex continues to test its new support level at 18500. Follow-through above 19000 would confirm the primary up-trend. Rising 13-week Twiggs Money Flow (above zero) indicates buying pressure.

* Target calculation: 18.5 + ( 18.5 – 16.0 ) = 21.0

Japan’s Nikkei 225 is headed for another test of resistance at 9200. Breakout would indicate a rally to 10200. Oscillation of 13-week Twiggs Money Flow below zero, however, continues to warn of selling pressure. Respect of 9200 would indicate another test of primary support at 8500.

* Target calculation: 9200 + ( 9200 – 8200 ) = 10200

Asia: China, India and Japan

The Shanghai Composite Index is consolidating between 2000 and 2150. Descending 13-week Twiggs Money Flow warns of long-term selling pressure. Respect of resistance at 2150 is likely and breakout below 2000 would signal a decline to 1800*.

* Target calculation: 2150 – ( 2500 – 2150 ) = 1800

Shenzhen Composite Index is testing primary support at 800. Again, descending 13-week Twiggs Money Flow indicates long-term selling pressure. Resistance at 900 is likely to be respected, while breakout below primary support would offer a target of 600*.

* Target calculation: 800 – (1000 – 800 ) = 600

Japan’s Nikkei 225 is testing support at 8650/8700. Respect would indicate a rally to 9200, while failure would complete a double top reversal, signaling a test of primary support at 8200. Rising 13-week Twiggs Money Flow suggests medium-term buying pressure but the long-term picture remains negative. Breach of 8200 would signal a primary down-trend with an initial target of 7200*.

* Target calculation: 8200 – ( 9200 – 8200 ) = 7200

South Korea’s Seoul Composite Index is consolidating between 1950 and 2000. Rising 13-week Twiggs Money Flow indicates buying pressure. Breakout above 2000 is likely, followed by a test of the year’s high at 2050.

* Target calculation: 2050 + ( 2050 – 1900 ) = 2200

India’s Sensex is retracing to test the new support level at 18500. Respect would signal a strong up-trend, but even retracement to 18000 would not be cause for concern. Rising troughs above zero on 13-week Twiggs Money Flow indicate buying pressure. Follow-through above 19000 would signal an advance to 21000*.

* Target calculation: 18.5 + ( 18.5 – 16.0 ) = 21.0

Singapore’s Straits Times Index retreated from resistance at 3100. Expect another test of support at 3000; confirmed if short-term support at 3050 is breached. Recovery above 3100 would confirm an advance to 3300 — as would a 63-day Twiggs Momentum trough above zero.

* Target calculation: 3000 + ( 3000 – 2700 ) = 3300