Dow warns of reversal but VIX refutes
By Colin Twiggs
September 23rd, 2013 3:00 am EDT (5:00 pm AET)
Dow Jones Industrial Average tall shadow (or wick) on last week's candle warns of short-term selling pressure — echoing the long-term bearish divergence on 13-week Twiggs Money Flow. Reversal below 14800 would confirm a primary down-trend. Breakout above 15660 is unlikely, but would signal a fresh advance.
However, VIX below 15 continues to suggest a bull market.
I have more faith in the calculation of the S&P 500 index — which displays a milder bearish divergence. While reversal below 1630 would signal a reversal, it would not penetrate the long-term rising trendline; only breach of 1530 would be cause for serious alarm. Respect of support at 1630, on the other hand, would be bullish, suggesting an advance to 1850.
* Target calculation: 1700 + ( 1700 - 1550 ) = 1850
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