Tag: Dow Jones Industrial Average

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Dow and S&P bearish divergence

Dow Jones Industrial Average is already in a primary up-trend, having completed a higher trough late last year, and is now testing the 2011 high of 12800. Retracement to 12300 and the rising trendline is likely. Respect would confirm the new up-trend, but a large bearish divergence on 13-week Twiggs Money Flow warns of failure and a cross below zero would indicate reversal to a primary down-trend.

Dow Jones Industrial Average


The Nasdaq 100 displays a similar bearish divergence on 13-week Twiggs Money Flow, warning of strong selling pressure. Retreat below 2400 would indicate a bull trap.

Nasdaq 100 Index

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

The S&P 500 has not yet reached its 2011 highs but retreat of 13-week Twiggs Money Flow below zero would warn of strong selling pressure and a primary trend reversal.

S&P 500 Index

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Dow warns of correction

Dow Jones Industrial Average reversed below short-term support at 12000. Bearish divergence on 21-day Twiggs Money Flow warns of medium-term selling pressure — and a correction to test primary support at 10600. Reversal (of TMF) below zero and follow-through (of DJIA) below 11900 would strengthen the signal.

Dow Jones Industrial Average

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Dow, Nasdaq diverge

Dow Jones Industrial Average is testing resistance at 12300. Breakout would signal a primary advance to 13400 and an end to the bear market. Rising 63-day Twiggs Momentum is encouraging but will only be significant if retracement respects the zero line.

Dow Jones Industrial Average

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

The Nasdaq 100, however, displays a large bearish divergence on 13-week Twiggs Money Flow, warning of selling pressure. Reversal below 2040 would confirm a primary down-trend. Breakout above 2400 is less likely, but would suggest an advance to 2800*.

Nasdaq 100 Index

* Target calculation: 2400 + ( 2400 – 2000 ) = 2800

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US markets show promise of recovery

We are not out of the woods yet, but the S&P 500 weekly chart is starting to diverge from its mid-2008 pattern. Headed for a test of the descending trendline and resistance at 1300, an index breakout would signal a primary advance to 1450* and the end of the bear market. Recovery of 63-day Twiggs Momentum above zero would support this.

S&P 500 Index

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

Dow Jones Industrial Average, however, displays short-term resistance between 12000 and 12300 on the daily chart. Reversal of 21-day Twiggs Money Flow below zero would warn of rising selling pressure.

Dow Jones Industrial Average

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

Nasdaq 100 Index is headed for resistance at 2400. Upward breakout would offer a target of 2750*. Bearish divergence on 13-week Twiggs Money Flow warns of selling pressure, but breakout above the descending trendline would negate this.

Nasdaq 100 Index

* Target calculation: 2400 + ( 2400 – 2050 ) = 2750

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Dow in strong bear rally

Dow Jones Industrial Average rallied strongly in response to news of a European rescue by major central banks. Sharp rallies are typical of shorts covering in a bear market. Strong volume indicates resistance — if you look back over the last few months (ignore triple-witching at [W]) volume above 200 million normally precedes a reversal. Expect selling pressure at 12000 to 12300, leading to a reversal. Breakout above 12300 is unlikely but would be a strong bull signal, indicating that buyers have overcome resistance.

Dow Jones Industrial Average

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S&P 500 breaks 1200

The S&P 500 index broke medium-term support at 1200 and is headed for a test of the primary level at 1100. Failure would offer a target of 900*. The 63-day Twiggs Momentum peak below zero warns of a primary down-trend.

S&P 500 Index

* Target calculation: 1100 – ( 1300 – 1100 ) = 900

NASDAQ 100 index is similarly headed for the band of primary support between 2000 and 2050. Bearish divergence on 13-week Twiggs Money Flow warns of strong selling pressure. failure of support would signal a primary decline to 1600*.

Nasdaq 100 Index

* Target calculation: 2000 – ( 2400 – 2000 ) = 1600

Dow Jones Industrial Average monthly chart shows the index testing medium-term support at 11000. The 63-day Twiggs Momentum peak below zero again warns of a primary down-trend. Breach of support would test the primary level at 10400; and failure of that level would remove any doubt regarding a bear market.

Dow Jones Industrial Average

* Target calculation: 10400 – ( 12300 – 10400 ) = 8500

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Nasdaq, Dow warn of correction

The NASDAQ 100 index broke support at 2300 on the weekly chart, warning of a correction to test primary support at 2000. A large bearish divergence on 13-week Twiggs Money Flow now warns of a primary down-trend; reversal below zero would strengthen the signal. Failure of support at 2000 would confirm.

Nasdaq 100 Index

* Target calculation: 2000 – ( 2400 – 2000 ) = 1600

Dow Jones Industrial Average broke out below its recent pennant, warning of another test of primary support at 10600. Breach of support at 11600 would confirm the signal. Reversal of 63-day Twiggs Momentum below its recent lows (-4%) would complete an “iceberg” — with the indicator just peaking above the zero line — indicating a primary down-trend.

Dow Jones Industrial Average

* Target calculation: 10600 – ( 12200 – 10600 ) = 9000

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Nasdaq fails to dispel fears of a bear market

The Nasdaq 100 is consolidating in a narrow band below resistance at 2400 on the weekly chart, suggesting an upward breakout. Follow-through above 2450 would confirm the target of 2800*. 13-Week Twiggs Money Flow continues to signal buying pressure after an earlier bullish divergence.

Nasdaq 100 Index

* Target calculation: 2400 + ( 2400 – 2000 ) = 2800

The Dow Industrial Average is consolidating below 12300. Rising 21-day Twiggs Money Flow indicates medium-term buying pressure. Breakout above 12300 would offer a target of 12800*. Failure of support at 11600 is less likely, but would mean another test of primary support at 10600.

Dow Jones Industrial Average

* Target calculation: 12200 + ( 12200 – 11600 ) = 12800

The S&P 500 is similarly consolidating between 1220 and 1300. Expect strong resistance at 1350.

S&P500 Index


Comparing to early 2008, the S&P500 displays a similar pattern, with the index testing resistance at 1400. We are close to a watershed: reversal below medium-term support (1220) would be a strong bear signal, while follow-through above recent highs would dispel fears of another bear market.

Index

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Nasdaq threatens breakout

The Dow is testing medium-term support at 11600. Failure would mean another test of primary support at 10600, while respect of support (with breakout above 12300) would confirm the primary advance to 12800*. Rising 21-day Twiggs Money Flow continues to indicate buying pressure, favoring an advance.

Dow Jones Industrial Average

* Target calculation: 11600 + ( 11600 – 10400 ) = 12800

The S&P 500 is also testing medium-term support, this time at 1220. Respect would signal an advance to the 2011 high, while failure would re-test 1100. In the long-term, breach of 1100 would offer a target of 900* and breakout above 1350 would signal an advance to 1600.

S&P 500 Index

* Target calculation: 1100 – ( 1300 – 1100 ) = 900

Bullish divergence on the Nasdaq 100 indicates strong buying pressure and a likely reversal. Breakout above 2440 would signal an advance to 2800*. Reversal below 2300 is less likely, but would warn of another test of primary support at 2000.

Nasdaq 100 Index

* Target calculation: 2400 + ( 2400 – 2000 ) = 2800

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Now for the correction

Several weeks ago, when asked what it would take to reverse the bear market, I replied that it would take 3 strong blue candles on the weekly chart followed by a correction — of at least two red candles — that respects the earlier low. We have had three strong blue candles. Now for the correction.

On the S&P 500 expect retracement to test support at 1200 or 1250. Respect of 1250 would signal a strong up-trend, while failure of support at 1200 would warn of another test of primary support at 1100. A trough on 13-week Twiggs Money Flow that respects the zero line would also indicate strong buying pressure.

S&P 500 Index

* Target calculation: 1225 + ( 1225 – 1100 ) = 1350

Dow Jones Industrial Average weekly chart displays a similar picture. Expect retracement to test support at 11500. A peak on 63-day Twiggs Momentum that respects the zero line would be bearish — warning of continuation of the primary down-trend.

Dow Jones Industrial Average

* Target calculation: 11500 + ( 11500 – 10500 ) = 12500

The Nasdaq 100 is testing resistance at 2400 — close to the 2011 high. Breakout would signal a primary advance to 2800*, while respect would warn of another test of primary support at 2000. Bullish divergence on 13-week Twiggs Money Flow has warned of a reversal for several weeks.

Nasdaq 100 Index

* Target calculation: 2400 + ( 2400 – 2000 ) = 2800

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