The S&P 500 found support at 1430, closing the day with a decent blue candle. Avoidance of a double top and recovery above the lower trend channel indicate another test of 1475, but 21-day Twiggs Money Flow below zero still warns of medium-term selling pressure — a peak below zero would strengthen the signal. Breakout above 1475, however, would signal a primary advance, while reversal below 1430 would warn of a correction.
* Target calculation: 1420 + ( 1420 – 1280 ) = 1560
The Dow Jones Industrial Average (weekly chart) is similarly testing support at 13300. Bearish divergence on 63-day Twiggs Momentum indicates a weakening up-trend, and reversal below zero would warn of a primary down-trend. Recovery above 13650 would confirm the advance, while reversal below 13000 and the primary trendline would signal trend weakness.
* Target calculation: 13000 + ( 13000 – 12000 ) = 14000
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.
Talking about double tops; and I don’t know if this is in a realistic realm or not, but if you take a 20 year view of $DJI there is an extremely early but possible double top forming at the 14000 level. The indice is now within 5% of the Oct 2007 top and there is a marked reduction in volume as the indice has climbed to its present level. Coincidently, Twiggs money flow (daily 21) has been dropping since February and is now re-testing the zero line from below for the second time.
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