The S&P 500 broke support at 1500 and is headed for support at 1475.
On the weekly chart we can see that a correction below 1475 would target support at 1425 (the secondary trendline). Only primary support at 1350, however, would signal a reversal. A 63-day Twiggs Momentum trough above zero would indicate continuation of the up-trend, while retreat below zero would suggest a primary reversal.
The S&P 500 found support at 1500 and is headed for a re-test of resistance at 1525/1530. Bearish divergence on 21-day Twiggs Money Flow warns of mild selling pressure. Breakout above resistance would negate this, while reversal below 1500 and the rising trendline would warn of a correction.
Breach of the secondary trendline (above) would indicate a correction to test primary support at 1350. Recovery of 63-day Twiggs Momentum above 10% would increase likelihood of an upward breakout — with a target of 1750* — while retreat below zero would suggest a primary reversal.
* Target calculation: 1550 + ( 1550 – 1350 ) = 1750
The Nasdaq 100 is weaker, with bearish divergence on 13-week Twiggs Money Flow warning of a primary trend reversal. Breakout below primary support at 2500 would confirm, offering a target of 2100*.
* Target calculation: 2500 + ( 2900 – 2500 ) = 2100
The S&P 500 retreated below 1525, heading for support at 1500. Failure of support would test the secondary trendline at 1475. Bearish divergence on 21-day Twiggs Money Flow warns of selling pressure, but may not be sufficient to start a full-blown correction.
Breach of the secondary trendline at 1475 would indicate a test of primary support at 1350. Recovery of 63-day Twiggs Momentum above 10% would increase likelihood of an upward breakout — with a target of 1750* — while retreat below zero would suggest a primary reversal.
* Target calculation: 1550 + ( 1550 – 1350 ) = 1750
The S&P 500 is testing short-term resistance at 1525 on the daily chart. Breakout would signal an advance to 1550. Bearish divergence on 21-day Twiggs Money Flow, however, warns of retracement to the rising trendline.
The quarterly chart warns us to expect strong resistance at the 2000/2007 highs of 1550/1575. Recovery of 63-day Twiggs Momentum above 10% would increase likelihood of an upward breakout — with a target of 1750* — while retreat below zero would suggest a primary reversal.
* Target calculation: 1550 + ( 1550 – 1350 ) = 1750
The Nasdaq 100 is testing resistance at 2800 on the monthly chart. Breakout would suggest a primary advance to 3200* but bearish divergence on 13-week Twiggs Money Flow warns of a reversal. Breach of the rising trendline would strengthen the signal.
* Target calculation: 2800 + ( 2800 – 2400 ) = 3200
I repeat my warning of the last few weeks:
These are times for cautious optimism. Central banks are flooding markets with freshly printed money, driving up stock prices, but this could create a bull trap if capital investment, employment and corporate earnings fail to respond.
The S&P 500 displays a small broadening wedge (reverse pennant) on the daily chart. Respect of support at 1500 on the last down-swing (within the wedge) suggests an upward breakout. Watch for bearish divergence on 21-day Twiggs Money Flow — which would warn of retracement to the rising trendline.
The quarterly chart warns us to expect strong resistance at the 2000/2007 highs of 1550/1575. Recovery of 63-day Twiggs Momentum above 10% would increase likelihood of an upward breakout — with a target of 1750* — while retreat below zero would suggest a primary reversal.
* Target calculation: 1550 + ( 1550 – 1350 ) = 1750
The Dow is similarly testing long-term resistance, at 14000. Breakout is likely, with 13-week Twiggs Money Flow troughs at zero indicating long-term buying pressure.
I repeat my warning from last week:
These are times for cautious optimism. Central banks are flooding markets with freshly printed money, driving up stock prices, but this could create a bull trap if capital investment, employment and corporate earnings fail to respond.
The S&P 500 displays evidence of buying pressure on the daily chart, with brief retracement to test support at 1500 followed by a surge to a new 5-year high. Expect a test of the 2000/2007 highs at 1550/1565.
Troughs above the zero line on 13-week Twiggs Money Flow indicate longer-term buying pressure. Breakout is likely and would signal an advance to 1750*. Reversal below 1500, however, would warn of a widely predicted correction.
* Target calculation: 1550 + ( 1550 – 1350 ) = 1750
Declining 63-day Twiggs Momentum on the Nasdaq 100, however, warns of a reversal. Respect of resistance at 2800 would strengthen the warning, while retreat below 2500 would complete a head and shoulders reversal. Follow-through above 2900 is less likely, but would confirm a bull market signal from the Dow/S&P 500.
These are times for cautious optimism. Central banks are flooding markets with freshly printed money, driving up stock prices, but this could create a bull trap if corporate earnings, capital investment and employment fail to respond.
The S&P 500 is headed for a test of the 2000/2007 highs at 1550/1565. Expect resistance but troughs above the zero line on 13-week Twiggs Money Flow indicate long-term buying pressure. Breakout is likely and would signal an advance to 1750*. Breach of the rising trendline would test of support at the long-term trendline — around 1400.
* Target calculation: 1550 + ( 1550 – 1350 ) = 1750
A quick recap of the quarterly chart overview from December 2012:
The S&P 500 is headed for a test of its 2000/2007 high at 1550. Declining 63-day Twiggs Momentum and a lackluster economy suggest that resistance is unlikely to be broken. Breach of the rising trendline would indicate a test of support at 1100.
Canada’s TSX Composite Index is gaining momentum. Follow-through above 13000 would indicate another test of 15000.
Germany’s DAX threatens a breakout above 8000. Follow-through above 8200 would confirm a strong primary advance.
The FTSE 100 broke resistance at 6000, suggesting an advance to 7000.
India’s Sensex is testing resistance at 21000. Rising momentum indicates breakout is likely, heralding a fresh primary advance.
Singapore’s Straits Times Index lags behind, but breakout above 3300 is likely and would indicate an advance to 3900.
The Shanghai Composite is headed for a re-test of long-term support at 1800/1750. Rising momentum suggests that a bottom will form at this level. Recovery above 2500 and/or the declining trendline would strengthen the signal.
The ASX 200 is headed for a test of resistance at 5000, supported by rising 63-day Twiggs Momentum. Breakout would signal an advance to 6000, but weakness in China or the US may delay this for some time.
Quarterly charts for the last two decades give a good idea of where stocks will be headed in 2013.
The S&P 500 is headed for a test of its 2000/2007 high at 1550. Declining 63-day Twiggs Momentum indicates that resistance is unlikely to be broken. While this does not mean another fall to 750, it does suggest a strong correction.
Apple Inc. [AAPL] is no longer leading the advance but testing primary support at 500. Failure of support would confirm the primary down-trend indicated by a 63-day Twiggs Momentum peak below zero.
Germany’s DAX is also headed for a test of its 2000/2007 high, at 8200, but rising momentum indicates that breakout above resistance is likely.
The FTSE 100 is also advancing but is some way off its earlier high of 7000 and breakout appears unlikely.
India’s Sensex is more bullish and likely to break resistance at 21000.
The Shanghai Composite is headed in the opposite direction and likely to re-test long-term support at 1800/1750. Rising 63-day Twiggs Momentum (below zero) suggests that a bottom will form at this level.
The ASX 200 is headed for a test of resistance at 5000, supported by rising 63-day Twiggs Momentum. Breakout would signal an advance to 6000, but weakness in China and the US may delay this for some time.
The S&P 500 is retracing to test medium-term support at 1400 on the daily chart. Respect would signal an advance to 1475, while failure would indicate a test of primary support at 1350. Reversal of 21-day Twiggs Money Flow below zero would warn of selling pressure, but a higher trough (above/below zero) would suggest continuation of the advance to 1475.
