Central banks are flooding the markets with liquidity, causing stocks to rise despite weak fundamentals. Large bearish divergences on 13-week Twiggs Money Flow for Dow Industrials and the Nasdaq 100 highlight the precarious nature of the current rally. But, as I said earlier, don’t bet on this ending before the November election.
Dow Jones Industrial Average broke resistance at 12800, joining the Nasdaq 100 above its 2011 high. All four major indices display a primary up-trend, collectively signaling a bull market. Rising 13-week Twiggs Money Flow indicates medium-term buying pressure on the Dow and target for the initial advance is 13400*.
* Target calculation: 12300 + ( 12300 – 11200 ) = 13400
The S&P 500 is a little way behind, but rising 13-week Twiggs Money Flow indicates buying pressure. Breakout above 1370 is likely to confirm an advance to 1450*.
* Target calculation: 1300 + ( 1300 – 1150 ) = 1450
The Nasdaq 100 index followed through above 2500, confirming the primary up-trend, while rising 13-week Twiggs Money Flow indicates medium-term buying pressure.
* Target calculation: 2400 + ( 2400 – 2150 ) = 2650
Dow Jones Transport Average is also in a primary up-trend; and headed for a test of resistance at 5600. New highs on 13-week Twiggs Money Flow indicate long-term buying pressure.
* Target calculation: 5000 + ( 5000 – 4500 ) = 5500
I am a learner – studying technical analysis & early paper trading. Find Incredible Charts very useful. I notice that with your analysis above – the 13 week TMF shows divergence on the top x 3 – 2 year charts, but this doesn’t happen when applied to the 1 year or 6 months charts. As a beginner, I am confused by this difference. In your comments – you apply weight to these 2 year charts. I would be very interested to know why. Is it because a shorter time frame TMF is only relevant for the 1 year & 6 months charts? When I apply the default 21 day to the daily 1 year & 6 month chart there is no divergence.
I would very much appreciate some feedback. Kind Regards,True Grant for Robert Grant
Hi Robert as far as I am concerned they have it wrong.
I left a comment last week as to the reasons why I thought so but no reaction so far. If you paste the TMF over the chart you will see that there is no divergence of any kind, it follows the price action. If the indicator crosses the trigger line it cancels out any divergence, bullish or bearish whatever.
By the trigger line do you mean the zero line?
The dollar is a silver coin, no longer in common circulation. Federal Reserve Notes have not been redeemable into money (coined gold and silver money) since 1965. Hence we have no ptactical standard of value by which to gauge value. Thus we can expect the repudiation of value elements as the issue of repudiation makes its way through society and our legal system. A harsh collapse will come to markets as all values come under questioning. Expect the game will end soon as folks come to understand that the emperor has no clothes. We are using the funny “money” to capitalize on this by purchasing inverse ETFs, converting profits into physical silver as they occur.
How has it been possible for months and even years to have a bearish view on the major markets when the mark 1 eye ball sees continually higher bottoms and tops. No matter how much gloom and doom is spoken and irrespective that we still havnt got over the shock of the original crunch of 2008/9 which we keep projecting forward into more misery, the picture is +ve. For some reason we all choose to be confused by the facts. Amazing!