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
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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