S&P500 healthy up-trend
By Colin Twiggs
August 12th, 2013 9:00 pm EDT (11:00 am AET)
The S&P 500 is again testing resistance at 1700 after a short retracement. Bearish divergence on 21-day Twiggs Money Flow continues to warn of selling pressure, but breakout above 1700 would signal an advance to 1800*. Reversal below 1675 would test support at 1650.
* Target calculation: 1680 + ( 1680 - 1560 ) = 1800
But the primary up-trend shown on the quarterly chart is healthy and, while correction to the rising trendline would be reasonable, trend reversal is unlikely.
The VIX below 15 indicates low market risk.
Canada's TSX 60 VIX is similarly bullish.
The TSX Composite Index is testing support at 12400. Penetration of the declining trendline would indicate the correction is over and advance to 12900/13000 likely. A 21-day Twiggs Money Flow trough above zero would suggest a healthy up-trend. Breach of support remains as likely, however, and would test 12250. In the long-term, breakout above 12900/13000 would offer a long-term target of 14000*.
* Target calculation: 13000 + ( 13000 - 12000 ) = 14000
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