Tag: Dow Jones Industrial Average

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US: Signs a top is forming?

The S&P 500 continues to test support at 1400. Bearish divergence on 63-day Twiggs Momentum warns that a top may be forming. Breach of support would strengthen the signal. The market is currently enjoying the “honeymoon” period in the lead up to the election. Reality is likely to bite after the results are in, as the government deals with some tough choices — like how to create jobs while reducing the budget deficit.

S&P 500 Index
The Dow Jones Industrial Average is similarly testing support at 13000 on the weekly chart. Breach of support — and the primary trendline — would warn that a top is forming. A 13-week Twiggs Money Flow reversal below zero would indicate rising selling pressure, while a trough above the line would suggest another primary advance. Recovery above 13650 is unlikely at present but would confirm an advance.

Dow Jones Industrial Average

* Target calculation: 13000 + ( 13000 – 12000 ) = 14000

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US: S&P 500 correction

The S&P 500 broke support at 1420, following a trend channel breakout, both signaling a correction. Reversal of 21-day Twiggs Money Flow below zero warns of renewed (medium-term) selling pressure — a peak below zero would strengthen the signal. Breach of 1400 would further strengthen the signal.

S&P 500 Index
The Dow Jones Industrial Average similarly broke support at 13300 on the weekly chart. Bearish divergence on 63-day Twiggs Momentum indicates a weakening up-trend; reversal below zero would warn of a primary down-trend. Breach of support at 13000 — and the primary trendline — would warn that a top is forming. Recovery above 13650 is unlikely at present but would indicate an advance.

Dow Jones Industrial Average

* Target calculation: 13000 + ( 13000 – 12000 ) = 14000

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US: Earnings scare

Disappointing quarterly earnings from Google, Microsoft, Intel, IBM and McDonald’s over the past week led to a sell-off on Friday. The S&P 500 is again testing support at 1430. Reversal of 21-day Twiggs Money Flow below zero warns of renewed (medium-term) selling pressure — a peak below zero would strengthen the signal. Breach of 1430 would signal a correction; follow-through below 1420 would confirm.

S&P 500 Index

* Target calculation: 1420 + ( 1420 – 1280 ) = 1560

The Dow Jones Industrial Average is similarly testing support at 13300 (weekly chart). Bearish divergence on 63-day Twiggs Momentum indicates a weakening up-trend, and reversal below zero would warn of a primary down-trend. Reversal below 13000 and the primary trendline would suggest that a top is forming. Recovery above 13650 is unlikely but would indicate an advance.

Dow Jones Industrial Average

* Target calculation: 13000 + ( 13000 – 12000 ) = 14000

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US: Not yet out of the woods

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.

S&P 500 Index

* 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.

Dow Jones Industrial Average

* Target calculation: 13000 + ( 13000 – 12000 ) = 14000

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Lackluster S&P 500 and Dow Industrials

The S&P 500 Index is currently consolidating between 1400 and 1420. Lackluster momentum suggests another correction; confirmed if Twiggs Momentum (63-day) reverses below zero. Breakout above 1420, however, would signal an advance to the 2007 high of 1560*.

S&P 500 Index

* Target calculation: 1420 + ( 1420 – 1280 ) = 1560

The Dow Jones Industrial Average is similarly testing support at 13000 on the weekly chart. Downward breakout would penetrate the rising trendline, suggesting another correction. Weak volume signals a lack of interest from buyers rather than resistance from sellers. Upward breakout above 13300 is unlikely, but would indicate an advance to the 2007 high of 14200.

Dow Jones Industrial Average

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S&P 500 and Dow: correction is over

The S&P 500 closed Friday above resistance at 1340, confirming the bullish divergence on 21-day Twiggs Money Flow (hat tip johnb). Expect retracement to test the new support level, followed by a rally to the March/April high of 1420. Wait for breakout on the Nasdaq 100 to confirm the Dow and S&P 500 signals.

S&P 500 Index

Dow Jones Industrial Average broke medium-term resistance at 12600/12700, indicating a rally to 13300. Expect retracement to first test the new support level. A bounce off the zero line by 13-week Twiggs Money Flow indicates medium-term buying pressure — and a likely rally — but the long-term bearish divergence remains and suggests strong resistance at 13300.

Dow Jones Industrial Average

Nasdaq 100 has penetrated its descending trendline, signaling a bottom, but has yet to break resistance at 2580 — which would signal an advance to 2800 and confirm the Dow/S&P signals. Bullish divergence on 21-day Twiggs Money Flow indicates medium-term buying pressure.

Nasdaq 100 Index

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Selling pressure warns of correction

Medium-term selling pressure, signaled by bearish divergence on 21-day Twiggs Money Flow, continues to warn of a correction in US and Asia-Pacific markets. The Dow Jones TSM (formerly “Wilshire”) Asia-Pacific Index displays a bearish divergence since mid-February. Reversal below 1280 would confirm a correction.

Dow Jones TSM Asia-Pacific Index

Dow Jones Industrial Average shows a similar bearish divergence, though the latest down-turn was exaggerated by triple-witching hour [TW] on Friday. Reversal below 12750 would confirm a correction.

Dow Jones Industrial Average

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US stocks bullish

Dow Jones Industrial Average consolidating in a narrow range below resistance at 13,000 suggests an upward breakout and continuation of the primary up-trend. Strong values on 21-day Twiggs Money Flow indicate buying pressure.

Dow Jones Industrial Average

* Target calculation: 12200 + ( 12200 – 11200 ) = 13200

The S&P 500 displays a strong primary up-trend on 63-day Twiggs Momentum. Breakout above 1370 would complete the picture, offering a medium-term target of 1450*.

S&P 500 Index

* Target calculation: 1300 + ( 1300 – 1150 ) = 1450

The Nasdaq 100 is building up a head of froth and is due for a correction to test support at 2400. Breach of the secondary rising trendline would give an early warning. Bearish divergence on 13-week Twiggs Money Flow continues to warn of long-term weakness.
Nasdaq 100 Index

* Target calculation: 2400 + ( 2400 – 2150 ) = 2650

Bellwether transport stock Fedex continues in a primary up-trend, though rising oil prices could spoil the party. Respect of the rising trendline would reinforce the up-trend.

Fedex

Bear in mind that we are experiencing a lot of window-dressing ahead of the November election. The Fed is suppressing long-term interest rates, making stocks a more attractive alternative (the lesser of two evils). While ECRI’s Lakshman Achuthan points out that retail sales, the true driver of economic recovery, remain soft. There are some positive signs, however, so follow the rally by all means — but with caution. This is not another massive bull market like the 1990s. Not without a strong rise in debt levels — which is most unlikely. Markets will remain risk-averse for most of this decade — as long as it takes to clean up the mess.

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Dow and S&P 500 test key resistance

Dow Jones Industrial Average is testing resistance at 12800. A large bearish divergence would be completed if 13-week Twiggs Money Flow retreated below 10% — and would warn of a bull trap. Reversal below medium-term support at 12300 and the rising trendline would also warn of trend weakness, while respect of these levels would indicate a primary advance to 13400*.

Dow Jones Industrial Average

* Target calculation: 12300 + ( 12300 – 11200 ) = 13400

The S&P 500 displays similar weakness on 13-week Twiggs Money Flow, but rising 63-day Twiggs Money Flow indicates trend strength. Breakout above 1370 would indicate an advance to 1450*.

S&P 500 Index

* Target calculation: 1300 + ( 1300 – 1150 ) = 1450

The Nasdaq 100 made a strong breakout above 2400, indicating a primary up-trend. Expect a retracement to test the new support level (2400); respect would confirm the up-trend.

Nasdaq 100 Index

* Target calculation: 2400 + ( 2400 – 2150 ) = 2650

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Bull market signaled as liquidity soars

Central banks are flooding the markets with liquidity, causing stocks to rise despite weak fundamentals. Large bearish divergences on 13-week Twiggs Money Flow for Dow Industrials and the Nasdaq 100 highlight the precarious nature of the current rally. But, as I said earlier, don’t bet on this ending before the November election.

Dow Jones Industrial Average broke resistance at 12800, joining the Nasdaq 100 above its 2011 high. All four major indices display a primary up-trend, collectively signaling a bull market. Rising 13-week Twiggs Money Flow indicates medium-term buying pressure on the Dow and target for the initial advance is 13400*.

Dow Jones Industrial Average

* Target calculation: 12300 + ( 12300 – 11200 ) = 13400

The S&P 500 is a little way behind, but rising 13-week Twiggs Money Flow indicates buying pressure. Breakout above 1370 is likely to confirm an advance to 1450*.

S&P 500 Index

* Target calculation: 1300 + ( 1300 – 1150 ) = 1450

The Nasdaq 100 index followed through above 2500, confirming the primary up-trend, while rising 13-week Twiggs Money Flow indicates medium-term buying pressure.

Nasdaq 100 Index

* Target calculation: 2400 + ( 2400 – 2150 ) = 2650

Dow Jones Transport Average is also in a primary up-trend; and headed for a test of resistance at 5600. New highs on 13-week Twiggs Money Flow indicate long-term buying pressure.

Dow Jones Transport Average

* Target calculation: 5000 + ( 5000 – 4500 ) = 5500

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