Tag: $VIX

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Bull market but correction overdue

Both the S&P 500 and Nasdaq 100 have exceeded their targets. Absence of a significant correction for several months indicates extreme bullishness, but makes the advance more precarious as buyer/seller imbalances grow.

The S&P 500 is testing medium-term resistance at 1850. Breakout would confirm a target of 1900*. Respect is less likely, but would warn of a correction if followed by reversal below 1810. Rising 21-day Twiggs Money Flow suggests (short-term) buying pressure, but reversal below the rising trendline would warn of medium-term bearishness.

S&P 500

* Target calculation: 1850 + ( 1850 – 1800 ) = 1900

Declining CBOE Volatility Index (VIX) readings for the S&P 500 continue to indicate a bull market.

VIX Index

The Nasdaq 100 is similarly testing resistance at 3600. Twiggs Money Flow troughs high above the zero line indicate strong buying pressure. Absence of a significant correction makes the advance more precarious, but the imbalance can endure for several months.

Nasdaq 100

* Target calculation: 3600 + ( 3600 – 3500 ) = 3700

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Bullish VIX readings for the S&P 500

Declining CBOE Volatility Index (VIX) readings for the S&P 500 continue to indicate a bull market.

VIX Index

The S&P 500 itself is headed for another test of short-term resistance at 1850. Breakout would confirm the target of 1910*, while respect would warn of a correction, especially if followed by reversal below 1800. The recent decline in 13-week Twiggs Money Flow was secondary in nature and less severe than the corrections in June and August 2013; troughs high above the zero line are a long-term bull signal.

S&P 500

* Target calculation: 1810 + ( 1810 – 1710 ) = 1910

The Nasdaq 100 continues its accelerating up-trend, with Twiggs Money Flow troughs above the zero line indicating long-term buying pressure. The last decent correction was in June 2013 and continuation of the advance much further without a correction would suggest the market is becoming over-extended.

Nasdaq 100

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S&P 500, Nasdaq bullish

Short (3-day) retracement on the S&P 500 would indicate a strong trend. Follow-through above 1850 would confirm the target of 1910*. Rising 21-day Twiggs Money Flow highlights medium-term buying pressure.

S&P 500

* Target calculation: 1810 + ( 1810 – 1710 ) = 1910

CBOE Volatility Index (VIX) readings below 20 continue to indicate a bull market.

VIX Index

The Nasdaq 100 continues its accelerating up-trend, with rising Twiggs Money Flow troughs above the zero line indicating strong buying pressure. The last decent correction was in June 2013 and continuation of the advance much further without another correction of at least 2 to 3 weeks would suggest the market is becoming over-extended.

Nasdaq 100

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S&P 500 correction over?

The S&P 500 found support at 1775, but declining 21-day Twiggs Money Flow warns the correction is not yet over. Breach of 1775 would indicate a test of the ascending trendline and medium-term support at 1730. Recovery above 1810 is less likely, but would suggest an accelerating up-trend — with sharper gains and shorter retracements.

S&P 500

* Target calculation: 1725 + ( 1725 – 1650 ) = 1800

CBOE Volatility Index (VIX) readings below 20 are indicative of a bull market.

VIX Index

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S&P 500 and Nasdaq bouyant

The S&P 500 is advancing strongly but expect some resistance at the target of 1800*. Penetration of the descending trendline on 13-week Twiggs Money Flow suggests that selling pressure is easing. Reversal below 1750 is unlikely at present, but would warn of a correction to at least the secondary trendline at 1700. Short corrections are indicative of long-term buying pressure.

S&P 500

* Target calculation: 1725 + ( 1725 – 1650 ) = 1800

Bellwether transport stock Fedex exceeded its target of $130*, with rising Twiggs Money Flow indicating strong buying pressure. A bullish sign for the US economy.

Fedex

* Target calculation: 100 + ( 100 – 70 ) = 130

CBOE Volatility Index (VIX) below 15 continues to indicate low market risk.

VIX Index

The Nasdaq 100 continues its accelerating up-trend, breaking resistance at 3400 after a brief consolidation. Rising Twiggs Money Flow, with troughs above the zero line, indicates strong buying pressure. Target for the advance is 3550*. Accelerating trends, or blow-offs, enjoy rapid gains but inevitably end with a sharp fall.

Nasdaq 100

* Target calculation: 3400 + ( 3400 – 3250 ) = 3550

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Nasdaq accelerates while Dow and S&P500 hesitate

The Nasdaq 100 continues its accelerating up-trend — as indicated by successively steeper trendlines and a rising trendline on 13-week Twiggs Momentum. Accelerating trends, or blow-offs, are well-known for rapid gains but inevitably end with a sharp fall.

Nasdaq 100

* Target calculation: 2900 + ( 2900 – 2500 ) = 3400

The CBOE Volatility Index (VIX) remains below 15, indicating low market risk.

VIX Index

The S&P 500 is edging higher on the weekly chart, but bearish divergence on 13-week Twiggs Money Flow warns of rising selling pressure. Reversal below the secondary trendline at 1700 would indicate a correction to the primary trendline and primary support at 1630.

S&P 500

* Target calculation: 1730 + ( 1730 – 1650 ) = 1810

Dow Jones Industrial Average is testing resistance at 15700. Breakout would offer a target of 16600*. Respect of the descending trendline on 13-week Twiggs Money Flow, however, would confirm the earlier bearish divergence and warn of a correction to primary support at 14800. Breach of 14800 remains unlikely, but would signal a reversal.

Dow Jones Industrial Average

* Target calculation: 15700 + ( 15700 – 14800 ) = 16600

Canada’s TSX 60 is retracing after a strong spurt. Duration of retracements reflect trend strength. Another trough above zero on 13-week Twiggs Money Flow would suggest strong buying pressure. Reversal below 740 is most unlikely, but would warn of trend weakness.

TSX 60

* Target calculation: 740 + ( 740 – 680 ) = 800

TSX 60 VIX below 15 also reflects low market risk.

TSX 60 VIX

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US & Canada: Rising buying pressure

The S&P 500 short retracement at 1750 is a bullish sign, confirming the advance to 1800*. Rising 21-Day Twiggs Money Flow indicates buying pressure. Reversal below 1730 is most unlikely at present, but would warn of a test of primary support at 1650.

S&P 500

* Target calculation: 1730 + ( 1730 – 1650 ) = 1810

VIX below 15 flags low market risk.

VIX Index

Dow Jones Industrial Average is headed for a test of resistance at 15700; breakout would offer a target of 16600*. Recovery above the descending trendline on 13-week Twiggs Money Flow would negate the earlier bearish divergence. Breach of 14800 is unlikely, but would warn of a reversal.

Dow Jones Industrial Average

* Target calculation: 15700 + ( 15700 – 14800 ) = 16600

The Nasdaq 100, with 13-week Twiggs Money Flow troughs well above zero, indicates strong buying pressure.

Nasdaq 100

Canada’s TSX 60 is advancing toward its target of 800*, the trough above zero on 13-week Twiggs Money Flow indicating strong buying pressure. Reversal below 740 is now most unlikely.

TSX 60

* Target calculation: 740 + ( 740 – 680 ) = 800

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S&P 500 and Nasdaq bullish while Dow hesitates

The S&P 500 broke through resistance at 1730, signaling an advance to 1790/1800*. Follow-through above 1750 would confirm. 21-Day Twiggs Money Flow troughs close to zero indicate buying pressure. Reversal below 1730 is unlikely at present, but would warn of a test of primary support at 1650.

S&P 500

* Target calculation: 1710 + ( 1710 – 1630 ) = 1790

VIX below 15 signals low market risk.

VIX Index

Dow Jones Industrial Average is headed for a test of 15700, but bearish divergence on 13-week Twiggs Money Flow continues to warn of a reversal. Breach of 14800 would confirm. Overall sentiment remains positive, however, and TMF recovery above the descending trendline (20%) would be a bullish sign. Breakout above 15700 would offer a target of 16600*.

Dow Jones Industrial Average

* Target calculation: 15700 + ( 15700 – 14800 ) = 16600

The Nasdaq 100 is contrastingly bullish, with 13-week Twiggs Money Flow troughs well above zero signaling strong buying pressure.

Nasdaq 100

* Target calculation: 3050 + ( 3050 – 2800 ) = 3300

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Global markets bearish but ASX, India find support

US markets are closed for Labor Day. The S&P 500 ended last week testing its rising trendline and support at 1630. Breach would reinforce the bearish divergence on 21-day Twiggs Money Flow, indicating a test of primary support at 1560. Recovery above the descending trendline is unlikely at present, but would warn the correction is ending. In the long-term, failure of primary support would offer a target of 1400*.

S&P 500 Index

* Target calculation: 1550 – ( 1700 – 1550 ) = 1400

VIX below 20 suggests a bull market.
S&P 500 Index

The FTSE 100 closed above initial resistance at 6500. Follow-through would suggest the correction is over and another attempt at 6750 likely. Strong bearish divergence on 13-week Twiggs Money Flow, however, warns of selling pressure and breakout above 6750 is unlikely. Reversal below 6400 would warn of a test of primary support at 6000.

FTSE 100 Index

Germany’s DAX encountered stubborn resistance at 8500. Reversal below 8000 would test primary support at 7600, while breakout above 8500 would offer a target of 9000*.

DAX Index

* Target calculation: 8400 + ( 8400 – 7800 ) = 9000

Japan’s Nikkei 225 recovered above 13500 and follow-through above the descending trendline would suggest the correction is over and another test of resistance at 15000 is likely. Reversal below 13200, however, would indicate a test of primary support at 12500. Earlier bearish divergence on 13-week Twiggs Money Flow warns of long-term selling pressure.

Nikkei 225 Index

China’s Shanghai Composite is testing resistance at 2100/2120. Bearish divergence on 13-week Twiggs Money Flow warns of selling pressure. Reversal below 2050 would indicate another test of primary support at 1950. Breakout above 2200 and the descending trendline is unlikely, but would suggest that the down-trend is ending.

Shanghai Composite Index

India’s Sensex encountered strong support at 18000/18500, evidenced by the long tails on the weekly candles and rising 13-week Twiggs Money Flow.  Expect another test of resistance at 20500. Follow-through above 19000 would strengthen the signal.

BSE Sensex Index

The ASX 200 is headed for a test of 5250 after breaking resistance at 5150. Rising 13-week Twiggs Money Flow indicates medium-term buying pressure. Breakout above 5250 would be a welcome sign, suggesting another primary advance, but respect of resistance and a lower peak on Twiggs Money Flow would warn of a reversal.

ASX 200 Index

* Target calculation: 5250 + ( 5250 – 4750 ) = 5750

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S&P 500: Any gas left in the tank?

The S&P 500 managed to close at a new high, with most fund managers reporting good results for the quarter, but does this signal a new bull market or a last-gasp effort to lock in performance bonuses before the market subsides into a correction?

While markets may be rising, there is strong risk aversion.

This is definitely not a classic bull market.

One also needs to be wary of September and March quarter-ends. They often represent significant turning points, with new highs (red arrows) and new lows (green arrows) frequently proving unsustainable.

S&P 500 Index

* Target calculation: 1530 + ( 1530 – 1485 ) = 1575

While there is no sign of divergence on 13-week Twiggs Money Flow, which would indicate unusual selling pressure, it is important to remain vigilant over the next quarter rather than blindly follow the herd. Bearish (TMF) divergence or reversal of the S&P 500 below 1500 would warn of a correction.

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