Dow Jones Industrial Average bearish divergence on 13-week Twiggs Money Flow warns of a reversal. Failure of primary support at 14500/14600 would confirm. Recovery above 15000 would defer the test of primary support, but strong selling pressure should not be ignored.
Friday’s long-legged doji candle on the S&P 500 (daily chart) indicates hesitancy. Follow-through above the descending trendline would suggest that the correction is over, while a fall below the longer-term rising trendline would warn that momentum is slowing and another test of primary support at 1560 is likely. Bearish divergence on 21-day Twiggs Money Flow indicates selling pressure. In the long-term, failure of primary support would offer a target of 1400*.
* Target calculation: 1550 – ( 1700 – 1550 ) = 1400
VIX below 20, however, continues to suggest a bull market.
Rising 13-week Twiggs Money Flow and consolidation above the preceding peak at 3040/3050 on the Nasdaq 100 also favors continuation of the primary up-trend.
Signals are mixed at present, but a stronger bear signal on the Dow, or an upward spike on the VIX, would tilt probabilities towards a reversal.
What about the Bearish divergence on the weekly chart of the Nasdaq
Nasdaq 100 is still tentative. Bearish divergence would be completed if there is a fall on 13-week Twiggs Money Flow below its June low.
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I am somewhat confused by this post. I realize that you end by saying that signals are mixed at present, but you post conflicting remarks regarding similar 13 week Twiggs money flow indicators on both the Dow and the NASDAQ. On the Dow you maintain that the 13 week Twiggs money flow is divergent and warns of reversal. However a similar 13 week Twiggs money flow pattern on the NASDAQ elicits a comment indicating continuation of the primary trend. Are you saying that the existence of the consolidation above the previous peak on the NASDAQ is enough to offset the negative divergence of the Twiggs money flow? Thanks for the clarification.
Nasdaq 100 has positive signs on the price chart, while Dow is bearish, and divergence on 13-week Twiggs Money Flow is tentative until it falls below its June 2013 low.
Thanks for the clarification.