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S&P 500 and Nasdaq bullish while Dow hesitates

By Colin Twiggs
October 22nd, 2013 3:00 am EDT (5:00 pm AET)

These extracts from my trading diary are for educational purposes. Any advice contained therein is provided for the general information of readers and does not have regard to any particular person's investment objectives, financial situation or needs and must not be construed as advice to buy, sell, hold or otherwise deal with any securities or other investments. Accordingly, no reader should act on the basis of any information contained therein without first having consulted a suitably qualified financial advisor. Full terms and conditions can be found at Terms of Use.


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

Canada's TSX 60 broke through resistance at 740, signaling a long-term advance to 800*. A trough above zero on 13-week Twiggs Money Flow would confirm strong buying pressure. Reversal below 740 is most unlikely, but would warn of a bull trap.

TSX 60

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

TSX 60 VIX below 15 suggests low market risk.

TSX 60 VIX

It is not death that a man should fear, but he should fear never beginning to live.

~ Marcus Aurelius

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