The S&P 500 is testing short-term resistance at 1525 on the daily chart. Breakout would signal an advance to 1550. Bearish divergence on 21-day Twiggs Money Flow, however, warns of retracement to the rising trendline.
The quarterly chart warns us to expect strong resistance at the 2000/2007 highs of 1550/1575. Recovery of 63-day Twiggs Momentum above 10% would increase likelihood of an upward breakout — with a target of 1750* — while retreat below zero would suggest a primary reversal.
* Target calculation: 1550 + ( 1550 – 1350 ) = 1750
The Nasdaq 100 is testing resistance at 2800 on the monthly chart. Breakout would suggest a primary advance to 3200* but bearish divergence on 13-week Twiggs Money Flow warns of a reversal. Breach of the rising trendline would strengthen the signal.
* Target calculation: 2800 + ( 2800 – 2400 ) = 3200
I repeat my warning of the last few weeks:
These are times for cautious optimism. Central banks are flooding markets with freshly printed money, driving up stock prices, but this could create a bull trap if capital investment, employment and corporate earnings fail to respond.
Colin, you are correct. RSI is showing divergence on weekly charts for SPY and DIA. QQQ appears range bound on the weekly chart. Going long right now would be risky at best.