Monday’s engulfing candle [R] on the S&P 500 warns of reversal to re-test support at 1270. Respect of the zero line (from below) by 21-day Twiggs Money Flow would indicate strong medium-term selling pressure. Failure of support would offer a target of 1200*.
* Target calculation: 1270 – ( 1340 – 1270 ) = 1200
Colin Twiggs is a former investment banker with almost 40 years of experience in financial markets. He co-founded Incredible Charts and writes the popular Trading Diary and Patient Investor newsletters.
Using a top-down approach, Colin identifies key macro trends in the global economy before evaluating selected opportunities using a combination of fundamental and technical analysis.
Focusing on interest rates and financial market liquidity as primary drivers of the economic cycle, he warned of the 2008/2009 and 2020 bear markets well ahead of actual events.
He founded PVT Capital (AFSL No. 546090) in May 2023, which offers investment strategy and advice to wholesale clients.
The market may be forming a bottom having already tested lows. An inverted head-and-shoulder is in prospect. Of course negative collapse from here would ruke out such a positive interpretation.
Follow-through above 1335 would be bullish and would indicate another test of 1410, but that may not be the end of it. Momentum is falling.
Colin
I left a comment on fedex that was meant to be here. Anyway my comment was that you’re ignoring a positive divergence between the money flow and the price of the sp
John B
Good point. Recovery above 1335/1340 would strengthen this.