Dow Jones Industrial Average consolidating in a narrow range below resistance at 13,000 suggests an upward breakout and continuation of the primary up-trend. Strong values on 21-day Twiggs Money Flow indicate buying pressure.
* Target calculation: 12200 + ( 12200 – 11200 ) = 13200
The S&P 500 displays a strong primary up-trend on 63-day Twiggs Momentum. Breakout above 1370 would complete the picture, offering a medium-term target of 1450*.
* Target calculation: 1300 + ( 1300 – 1150 ) = 1450
The Nasdaq 100 is building up a head of froth and is due for a correction to test support at 2400. Breach of the secondary rising trendline would give an early warning. Bearish divergence on 13-week Twiggs Money Flow continues to warn of long-term weakness.
* Target calculation: 2400 + ( 2400 – 2150 ) = 2650
Bellwether transport stock Fedex continues in a primary up-trend, though rising oil prices could spoil the party. Respect of the rising trendline would reinforce the up-trend.
Bear in mind that we are experiencing a lot of window-dressing ahead of the November election. The Fed is suppressing long-term interest rates, making stocks a more attractive alternative (the lesser of two evils). While ECRI’s Lakshman Achuthan points out that retail sales, the true driver of economic recovery, remain soft. There are some positive signs, however, so follow the rally by all means — but with caution. This is not another massive bull market like the 1990s. Not without a strong rise in debt levels — which is most unlikely. Markets will remain risk-averse for most of this decade — as long as it takes to clean up the mess.
Hello Colin..When you say bullish are you referring to bullish for year 2012 or just a short term move up?With almost every technical indicator( at least the ones I know) showing the market overbought…how long do you think this inching up rally could last?
We are bound to see retracement before then, with the S&P 500 advancing in steps of 150/200 points, but I expect the broader rally to continue until the November 2012 election.
i dont get the strong moneyflow when the volume has been so light the past 3 weeks. it does not make sense. appears to be more of a topping action than a basing to move to higher levels.
Long tails contribute as much (to high Money Flow values) as strong volume.
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Gday Colin
On the daily chart of Fedex there appears to be a Head and Shoulders pattern with left shoulder around Jan 19/12 – Jan 27 and head peak 13/2 with the neck broken on 6/3.
What do you think?
Thanks for your charts and info.
James
Hi James, The pattern looks vague and I wouldn’t place much reliance on it. Regards, Colin