Dow and S&P 500 test key resistance

By Colin Twiggs
February 13th, 2012 4:00 a.m. ET (9:00 p.m. AET)

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Dow Jones Industrial Average is testing resistance at 12800. A large bearish divergence would be completed if 13-week Twiggs Money Flow retreated below 10% — and would warn of a bull trap. Reversal below medium-term support at 12300 and the rising trendline would also warn of trend weakness, while respect of these levels would indicate a primary advance to 13400*.

* Target calculations: 12300 + ( 12300 - 11200 ) = 13400

The S&P 500 displays similar weakness on 13-week Twiggs Money Flow, but rising 63-day Twiggs Money Flow indicates trend strength. Breakout above 1370 would indicate an advance to 1450*.

* Target calculations: 1300 + ( 1300 - 1150 ) = 1450

The Nasdaq 100 made a strong breakout above 2400, indicating a primary up-trend. Expect a retracement to test the new support level (2400); respect would confirm the up-trend.

* Target calculations: 2400 + ( 2400 - 2150 ) = 2650

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