The Nasdaq 100 broke through its January high, signaling an advance to 3800*. Retreat below the (secondary) rising trendline is unlikely, but would test primary support at 3400. Another 13-week Twiggs Money Flow trough high above zero indicates strong buying pressure.
* Target calculation: 3600 + ( 3600 – 3400 ) = 3800
The S&P 500 is testing similar resistance at 1850. Breakout would signal an advance to 1950*. Respect is unlikely, given the Nasdaq breakout, but would warn of another correction. Completion of a 13-week Twiggs Money Flow trough above zero would be a bullish sign.
* Target calculation: 1850 + ( 1850 – 1750 ) = 1950
CBOE Volatility Index (VIX) below 20 suggests low risk typical of a bull market.
Colin, I have been short the market all year and have been rewarded thus far. I could not go long the nasdaq at this time. It looks so phony. Been adding $100 a week to my fund and it has almost doubled since Jan, 1 2014. I did manage to get long once this month when the nasdaq was up 60 so I guess I can’t say I have been short all year. This morning I was short the Russell 2000 and when I read your post I got out to the money market. Bummer, I could have made over 2% staying in my 200 times short position.
So I am short this afternoons close with the inverse emerging markets 200 times and will hold for the next two weeks.
You don’t often see buying pressure as good as the Nasdaq 100, with 21-day Money Flow holding above zero for more than a year.
I also believe that we are in a 1-2-3 top formation. With the nasdaq 100 number 1 high on Tuesday the 18th with 3684.75 I look for a number 2 low in the next weeks with a 3 high next month and continued weakness lower for the remainder of the year.