Tag: S&P 500 Index

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Nasdaq 100 and S&P 500 threaten a correction

The Nasdaq 100 is testing medium-term support at 2630. Reversal of 21-day Twiggs Money Flow below zero warns of a correction; follow-through below Friday’s low of 2620 would confirm, offering an initial target of 2400.

Nasdaq 100 Index

The S&P 500 continues to test support at 1350/1370 on the weekly chart after penetrating its rising trendline. Declining 13-week Twiggs Money Flow indicates medium-term selling pressure. Failure of support would signal a correction with an initial target of 1300*, but the primary up-trend is not under immediate threat.

S&P 500 Index Weekly Chart

* Target calculation: 1350 – ( 1400 – 1350 ) = 1300

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Commodity and stock prices diverge

We had an interesting discussion last week about the correlation between commodities and stocks. The weekly chart below shows how CRB Commodities Index closely tracks the S&P 500 — except in times of extreme volatility like 2007/2008. We  are now witnessing another divergence, with the CRB headed for a test of primary support at 295 while the S&P 500 strengthens. Does weak demand for commodities indicate that stocks are over-priced as in 2007?  The Fed has been doing its best to depress bond yields, pumping up stock prices ahead of the November election. It is too early to tell what the outcome will be, but we need to monitor this relationship through the year.

CRB Commodities Index v. S&P 500 Index

The divergence between Brent Crude and Nymex Light Crude, from early 2011, continues. Both are in a primary up-trend, however, and breakout above the 2011 Nymex high would threaten the still fragile US recovery, offering a long-term target of $140/barrel. Brent is currently testing medium-term support at $115, but respect of this would also confirm a primary up-trend.

ICE Brent Afternoon Markers v. Nymex WTI Light Crude Weekly Chart

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US: S&P 500 and Nasdaq 100

The S&P 500 respected support at 1350/1370, again confirming the primary up-trend signaled by 63-day Twiggs Momentum in December 2011. Immediate target for the advance is 1450*. Reversal below 1350 is unlikely but would warn of a correction to 1300.

S&P 500 Index

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

The Nasdaq 100 gapped above 2700, on its way to a re-test of resistance at 2800. Completion of the flag formation indicates another primary advance. Reversal below 2650 is unlikely but would warn of a stronger correction. Retreat of 21-day Twiggs Money Flow below zero would also give a bear warning, while respect of the zero line would indicate buying pressure.

Nasdaq 100 Index

* Target calculation: 2800 + ( 2800 – 2650 ) = 2950

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US: S&P 500 and Nasdaq 100

The S&P 500 continues to test support at 1350/1370 after penetrating its rising trendline. Recovery above 1400 would indicate another advance, but declining 13-week Twiggs Money Flow warns that support is likely to fail, with a correction to 1300. In the longer term, respect of 1300 would indicate the primary up-trend is intact, while failure would signal trend weakness.

S&P 500 Index Weekly Chart

The Nasdaq 100 breached its (secondary) rising trendline, indicating a correction back to the primary trendline at 2500. Declining 13-week Twiggs Money Flow indicates selling pressure, but respect of the zero line would suggest that the primary up-trend is intact, presenting a possible buying opportunity for the more adventurous.

Nasdaq 100 Index

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Selling pressure on S&P 500 and Nasdaq 100

The S&P 500 is testing support at 1350 after penetrating its rising trendline. Failure of support would indicate a correction with an initial target of 1300. Respect of 1300 — and of the zero line by 13-week Twiggs Money Flow — would signal that the primary up-trend is intact and may present a buying opportunity for the more adventurous.

S&P 500 Index Weekly Chart

On the daily chart, recovery of the S&P 500 above 1400 would suggest a new primary advance, while breach of support at 1350 would signal a correction. Bearish divergence on 21-day Twiggs Money Flow indicates medium-term selling pressure.

S&P 500 Index Daily Chart

A similar (21-day Twiggs Money Flow) bearish divergence on the Nasdaq 100 warns of a correction. Breach of the rising trendline strengthens the signal. Follow-through below 2700 would confirm, offering an initial target of 2400.

Nasdaq 100 Index

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Bearish divergence for US indices

Bearish divergence on 21-day Twiggs Money Flow warns of medium-term selling pressure on the S&P 500 index. Expect a correction to test support at 1350/1370 unless we see 21-day Twiggs Money Flow recovering above 30%.

S&P 500 Index

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

The Nasdaq 100 index encountered resistance at 2800. Bearish divergence on 13-week Twiggs Money Flow over the last two weeks warns of a correction. Breach of the secondary, rising trendline would indicate a correction to the long-term trendline at 2500.

Nasdaq 100 Index

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

Bellwether transport stock Fedex warns of a double-top reversal. Longer-term bearish divergence on 13-week Twiggs Money Flow warns of strong selling pressure. Breach of support at 88 would signal a primary down-trend — and declining activity in the broader economy.

Fedex

* Target calculation: 88 – ( 98 – 88 ) = 78

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S&P 500 early rally

The S&P 500 surprised with an early rally, before the end of the quarter. Breach of resistance at 1415 on the hourly chart signals a new primary advance. Short retracement indicates a healthy up-trend — as does a trough above the zero line on 24-hour (4 day) Twiggs Momentum.

S&P 500 Index Hourly Chart

Bearish divergence on 21-day Twiggs Money Flow indicates medium-term selling pressure, but recovery above 30% would negate this. Immediate target for the advance is 1450, while the long-term target is 1600*.

S&P 500 Index

* Target calculation: 1300 + ( 1300 – 1150 ) = 1450; 1350 + (1350 – 1100) =1600

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Secondary correction, but watch Fedex

The weekly S&P 500 chart suggests retracement to the new support level at 1370. No major deviation on 13-week Twiggs Money Flow indicates this is merely a secondary correction. Respect of 1350 would signal a primary advance. Long-term target for the breakout is 1600*.

S&P 500 Index

* Target calculation: 1350 + ( 1350 – 1100 ) = 1600

Nasdaq 100 Index similarly displays a bearish divergence on 21-day Twiggs Money Flow but no major deviation on the 13-week indicator, suggesting a secondary correction to the long-term rising trendline.

Nasdaq 100 Index

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

Bellwether transport stock Fedex, however, displays a stronger bearish divergence, on 13-week Twiggs Money Flow. Failure of support at 88.00 would indicate reversal to a primary down-trend; follow-through below 86.00 would confirm. A Fedex down-trend would warn that economic activity is slowing.

Fedex

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US: Good week for Nasdaq and S&P 500

The Nasdaq 100 rallied strongly this last week, closing on its revised target of 2750*. Steeply rising 13-week Twiggs Money Flow indicates strong buying pressure. Extension of the rally above the target would be risky and we are likely to see retracement to test the new support level and (long-term) rising trendline at 2400.

Nasdaq 100 Index

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

The S&P 500 followed through after its breakout above 1370, signaling continuation of the primary up-trend. Expect retracement to confirm support at 1350 before an advance to our target of 1450.

S&P 500 Index

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

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S&P 500 and Nasdaq

An Hourly chart shows the S&P 500 Index consolidating below 1400. Breakout above the narrow flag would signal an advance to 1450*. Reversal below the trend channel is unlikely but would warn of retracement to 1340.

S&P 500 Index

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

The Nasdaq 100 exceeded its initial target of 2650, now revised to 2750, and is due for a correction. Bearish divergence on 21-day Twiggs Money Flow indicates medium-term selling pressure. Expect a test of support at 2400.

Nasdaq 100 Index

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

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