S&P 500 Index Archives - Page 8 of 12 - the patient investor %

August 20, 2012

S&P 500 and Nasdaq test key resistance

On the monthly chart, the S&P 500 Index is testing resistance at 1420. A trough above zero on 13-week Twiggs Money Flow indicates buying pressure. Breakout above 1420 would signal an advance to the 2007 high at 1560*.

S&P 500 Index

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

The Nasdaq 100 is similarly testing resistance at 2800 on the weekly chart. Breakout would offer a target of 3150*. A 63-day Twiggs Momentum trough above zero indicates continuation of the primary up-trend.

Nasdaq 100 Index

* Target calculation: 2800 + ( 2800 – 2450 ) = 3150

10-Year Treasury Yields recovered above initial resistance at 1.70 percent. Expect an attempt at the primary level of 2.40 percent. The Fed purchased $5 billion of Treasury notes/bonds (nominal) and MBS last week; so they are not the cause of the rise. Investors appear to be flowing out of Treasuries and driving stocks higher.

10-Year Treasury Yields

Colin Twiggs

Colin Twiggs is a former investment banker with almost 40 years of experience in financial markets. He co-founded Incredible Charts and writes the popular Trading Diary and Patient Investor newsletters.

Using a top-down approach, Colin identifies key macro trends in the global economy before evaluating selected opportunities using a combination of fundamental and technical analysis.

Focusing on interest rates and financial market liquidity as primary drivers of the economic cycle, he warned of the 2008/2009 and 2020 bear markets well ahead of actual events.
He founded PVT Capital (AFSL No. 546090) in May 2023, which offers investment strategy and advice to wholesale clients.

August 13, 2012

S&P 500 and Nasdaq

Bearish divergence on the S&P 500 Index (21-day Twiggs Money Flow) warns of increasing resistance as the index approaches 1420. Expect retracement to 1360/1380 followed by another attempt at 1420. Breakout would signal another primary advance. Reversal below the trend channel is unlikely but would warn of a correction to test primary support at 1280.

S&P 500 Index

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

The Nasdaq 100 is headed for 2800 on the weekly chart. A 63-day Twiggs Momentum trough above zero indicates a healthy primary up-trend.

Nasdaq 100 Index

* Target calculation: 2800 + ( 2800 – 2450 ) = 3150

Bellwether transport stock Fedex, however, is edging lower. Reversal of 63-day Twiggs Momentum below zero warns of a primary down-trend. Failure of primary support at $84 would confirm the primary down trend signaled by the March-April double-top. That would warn of an economic down-turn.

Fedex

Colin Twiggs

Using a top-down approach, Colin identifies key macro trends in the global economy before evaluating selected opportunities using a combination of fundamental and technical analysis.

August 7, 2012

US: S&P 500 and Nasdaq 100 buying pressure

The S&P 500 is headed for a test of 1420 on the weekly chart. Breakout would signal an advance to 1570* — the 2007 high. The 13-week Twiggs Money Flow trough above zero indicates strong long-term buying pressure.

S&P 500 Index

* Target calculation: 1420 + ( 1420 – 1270 ) = 1570

The Nasdaq 100 is headed for 2800*. A 63-day Twiggs Momentum trough above zero would confirm the primary up-trend. Breakout would offer a target of 3150*.

Nasdaq 100 Index

* Target calculation: 2800 + ( 2800 – 2450 ) = 3150

Colin Twiggs

Using a top-down approach, Colin identifies key macro trends in the global economy before evaluating selected opportunities using a combination of fundamental and technical analysis.

July 31, 2012

S&P 500 and Nasdaq 100 correction

The monthly chart of the S&P 500 shows 63-day Twiggs Momentum has been falling for about two years but is now threatening to form a trough above zero which would signal resumption of the primary up-trend. Breakout above 1420 would confirm, offering a target of the 2007 high at 1550*. Respect of resistance, however, would mean more of the same gloomy outlook — our steady diet over the past few months.

S&P 500 Index Daily Chart

* Target calculation: 1400 + ( 1400 – 1250 ) = 1550

Respect of 2400 on the Nasdaq 100 monthly chart is also a bullish sign. Breakout above 2800 would offer a target of 3200*.

Nasdaq 100 Index

* Target calculation: 2800 + ( 2800 – 2400 ) = 3200

Colin Twiggs

Using a top-down approach, Colin identifies key macro trends in the global economy before evaluating selected opportunities using a combination of fundamental and technical analysis.

July 23, 2012

S&P 500 and Nasdaq remain bearish

The S&P 500 remains in a slow up-trend as indicated by narrow oscillation of 63-day Twiggs Momentum above zero. A fall below zero, or downward breakout from the trend channel would warn of another correction. In the long term, breakout above 1420 is unlikely, but would signal an advance to 1570*.

S&P 500 Index Weekly Chart

* Target calculation: 1420 + ( 1420 – 1270 ) = 1570

The Nasdaq 100 is in a similar trend channel on the weekly chart. Respect of resistance at 2660 would suggest another test of primary support at 2440. Reversal of 13-week Twiggs Money Flow below zero would warn of a primary down-trend.

Nasdaq 100 Index

Bellwether transport stock Fedex also displays an upward trend channel on the weekly chart but remains bearish after completion of an earlier double top formation. Reversal below the former neckline at 88.00 would strengthen the bear signal, while failure of primary support at 84.00 would confirm.

Fedex

Colin Twiggs

Using a top-down approach, Colin identifies key macro trends in the global economy before evaluating selected opportunities using a combination of fundamental and technical analysis.

July 17, 2012

S&P 500 and Dow Industrials remain bearish

The S&P 500 continues to test resistance at 1370 but declining 63-day Twiggs Momentum warns of a primary down-trend. Breach of the rising trendline would indicate a primary down-swing; confirmed if support at 1270 is broken. Reversal of 63-day Twiggs Momentum below zero would strengthen the bear signal. Breakout above 1420 is unlikely, but would signal an advance to 1570*.

S&P 500 Index Weekly Chart

* Target calculation: 1420 + ( 1420 – 1270 ) = 1570

The Dow Industrial Average is in a similar position, with bearish divergence on 13-week Twiggs Money Flow warning of selling pressure. Reversal of TMF below zero would indicate a primary down-trend .

Dow Industrial Average Index

Colin Twiggs

Using a top-down approach, Colin identifies key macro trends in the global economy before evaluating selected opportunities using a combination of fundamental and technical analysis.

July 11, 2012

S&P 500: Weak rally suggests down-turn

The S&P 500 is advancing on the weekly chart toward another test of 1420, but falling momentum warns of a primary down-trend. Reversal of 63-day Twiggs Momentum below zero would indicate a primary decline. Failure of primary support at 1270 would confirm, offering a target of 1170*. In the shorter term, recovery above 1370 would indicate a test of 1420. Breakout above 1420 is unlikely at this stage — especially with money flowing into bonds.

S&P 500 Index Weekly Chart

* Target calculation: 1270 – ( 1370 – 1270 ) = 1170

Colin Twiggs

Using a top-down approach, Colin identifies key macro trends in the global economy before evaluating selected opportunities using a combination of fundamental and technical analysis.

July 2, 2012

US: Wait for Nasdaq confirmation

The S&P 500 closed above medium-term resistance at 1360. I am normally wary of quarter-end prices moves as fund managers have a vested interest in boosting their performance bonuses. But the breakout appears to have a legitimate basis, with Germany’s key concessions at the Euro summit, and should test the 2012 high of 1420. 63-Day Twiggs Momentum holding above zero suggests the primary trend is intact. Reversal below the new support level (1360), however, would indicate a false signal. Falling 10-year treasury yields warn of another flight to safety (unless the Fed is driving down yields through its “Twist” operations) and we need to exercise caution.

S&P 500 Index

* Target calculation: 1360 + ( 1360 – 1300 ) = 1420

Wait for the Nasdaq 100 to break resistance at 2630 and confirm the S&P signal. Rising 21-day Twiggs Money Flow indicates medium-term buying pressure.

Nasdaq 100 Index

* Target calculation: 2650 + ( 2650 – 2500 ) = 2800

Bellwether transport stock Fedex (weekly chart) completed a double top reversal in April but since then has oscillated around the former neckline at $88. 63-Day Twiggs Momentum also recovered above zero. Follow-through above $92 would suggest that the correction is over and broader economic activity is recovering. Reversal below $85 is unlikely but would warn of a primary down-trend.

Fedex weekly

Colin Twiggs

Using a top-down approach, Colin identifies key macro trends in the global economy before evaluating selected opportunities using a combination of fundamental and technical analysis.

June 26, 2012

US and Canada: bull trap?

The S&P 500 retracement breached support at 1330, indicating a false breakout. Reversal of 21-day Twiggs Money Flow below zero would warn of a bull trap, while breach of support at 1270 would confirm another decline — with a target of 1160*.

S&P 500 Index

* Target calculation: 1260 – ( 1360 – 1260 ) = 1160

Nasdaq 100 monthly chart shows an intact up-trend despite slowing momentum. Respect of support at 2400 (and the zero line by 63-day Twiggs Momentum) would indicate another primary advance. Penetration of the rising trendline, however, would warn that a top is forming.

Nasdaq 100 Index

* Target calculation: 2800 + ( 2800 – 2400 ) = 3200

Canada’s TSX 60 shows similar weakness, on the daily chart, to the S&P 500. Rising 21-day Twiggs Money Flow, however, indicates support at 640. Respect would suggest that a bottom is forming — strengthened if the index recovers above the declining trendline. Breach of support, on the other hand, would signal a decline to 600*.

TSX 60 Index

* Target calculation: 640 – ( 680 – 640 ) = 600

Colin Twiggs

Using a top-down approach, Colin identifies key macro trends in the global economy before evaluating selected opportunities using a combination of fundamental and technical analysis.

June 18, 2012

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

Colin Twiggs

Using a top-down approach, Colin identifies key macro trends in the global economy before evaluating selected opportunities using a combination of fundamental and technical analysis.