The Dow Global index

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The real test...

The Dow Global index ($DJWO) is advancing towards its target of 280 after breaking resistance at 250. Rising Twiggs Money Flow (13-week) indicates buying pressure. Reversal below 235 is most unlikely, but would warn of a primary down-trend.

The global economy is recovering, but bear in mind this is a result of massive government intervention — mostly unsustainable — and the real test will come when this support is withdrawn.

Target calculations: 242 + ( 242 - 204 ) = 280

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Chinese bubble
China is expected to continue monetary tightening in an attempt to control inflation fueled by its massive 2008 stimulus program. This will impact not just on local markets, but on major resource producers such as Brazil and Australia.

The Dow Global index...

The Dow Global index ($DJWO) is undergoing a short retracement, but bearish divergence on Twiggs Money Flow (21-day) warns of a stronger correction. Reversal below 250 would indicate that Momentum is slowing; failure of support at 235 is unlikely at present but would signal a primary reversal.

* Target calculations: 242 + ( 242 - 204 ) = 280


The global economy is recovering, but the real test will come when government intervention diminishes

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The Dow Global Index...

The Dow Global index ($DJWO) is rising, but bearish divergence on Twiggs Money Flow (13-week) warns of a correction. Failure of short-term support at 256 would strengthen the signal. Breach of support at 236 remains unlikely, but would signal a primary reversal.

* Target calculations: 242 + ( 242 - 204 ) = 280


Global...
Brazil joining India in a primary down-trend, increases the chance of the contagion spreading to other markets. Inflation is already a problem in emerging economies and rising US treasury yields indicate that the market is anticipating its spread to developed economies, which will force the Fed and other central banks to close off the liquidity pump.

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The Dow Global index...

Global
Singapore joined Brazil and India in a primary down-trend, while HongKong, Taiwan and South Korea are all experiencing a sell-off. The risk of the contagion spreading to other markets remains, as central banks in emerging economies struggle to control inflation.

The Dow Global index ($DJWO) reached its medium-term target of 264*, while bearish divergence on Twiggs Money Flow (13-week) warns of a correction. Penetration of the rising (olive) trendline would strengthen the signal. Breach of support at 236 is unlikely, but would signal a primary reversal.


* Target calculations: 250 + ( 250 - 236 ) = 264

[setravis]

The Dow Global index...
The Dow Global index ($DJWO) continues its upward surge, with rising Twiggs Money Flow (21-day) indicating buying pressure. Penetration of the rising (olive) trendline would warn of a correction. Breach of support at 236 is unlikely, but would signal a primary reversal.

* Target calculations: 250 + ( 250 - 236 ) = 264



Chinese checkers in Paris
Western markets are strengthening, while eastern markets, apart from China, remain subdued. The world faces two major uncertainties at present: the outcome of pro-democracy demonstrations sweeping the Arab world, and the meaning (or lack thereof) of a convoluted 53-word sentence in the the G-20 communique from Paris.

G-20 Deal Reached, but Outcome Open to Interpretation.
PARIS—Negotiators from the world's leading economies haggled all night over seemingly technical details regarding how to measure global economic imbalances. They eventually produced a 53-word sentence intended to appease all sides—and open to interpretation by all sides.

"It means what it means what it means, just like a rose is a rose is a rose," Christine Lagarde, France's finance minister, told reporters after emerging from the Group of 20 talks.

The agony and near collapse of negotiations—as of noon on Saturday it appeared China's objections had led most sides to throw up their hands—illustrates how difficult and unwieldy the G-20...

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The Dow Global index...
Divergence warns of a correction
The Dow Global index ($DJWO) having reached its target of 264* displays a bearish divergence on Twiggs Money Flow (13-week), warning of selling pressure. Penetration of the rising (olive) trendline would indicate a correction. The primary trend remains up, with support at 236.


* Target calculations: 250 + ( 250 - 236 ) = 264

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The Dow Global index...
Global
Rising crude oil prices now threaten the global recovery, unless an (unlikely) quick resolution is found to the wave of protests sweeping the Arab world.

The Dow Global index ($DJWO) respected support at 260, but the bearish divergence on 13-week Twiggs Money Flow continues to warn of selling pressure. The primary trend remains up, but penetration of the rising (olive) trendline would signal a correction.

* Target calculations: 250 + ( 250 - 236 ) = 264

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Global...
Efforts to contain damage at the Fukushima reactor, 240 km North of Tokyo, continue. Japan is struggling to recover from the world's most costly natural disaster, with total losses now estimated at $300 billion. (NewsOnJapan)

In Libya, rebels advance on the capital Tripoli, while demonstrations in Syria, Bahrain and Yemen threaten the delicate Middle East balance. As Iraq has shown, toppling a brutal dictator and tearing down the existing order is futile unless you are able to replace it with a stable, supported government. Oppositional, winner-takes-all style of democracy, as practised in the UK or US, has failed to deliver stability in deeply divided countries like Iraq. Countries with strong ethnic, language or religious divisions may benefit from a more direct, Swiss style of democracy, with proportional representation in the ruling cabinet.

The Dow Global index ($DJWO) rallied strongly off the band of support around 250, indicating that the correction is losing momentum. Declining 13-week Twiggs Money Flow, however, continues to warn of selling pressure. Reversal below 260 would suggest another test of support at 250.