S&P 500 and Nasdaq 100 test key resistance
By Colin Twiggs
August 21st, 2012 4:00 a.m. ET (6:00 p.m. AET)
The S&P 500 Index is testing resistance at 1420 on the monthly chart. 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*.
* 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.
* 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.
Nothing great is produced suddenly, since not even the grape or the fig is. If you say to me now that you want a fig, I will answer to you that it requires time: let it flower first, then put forth fruit, and then ripen.