Dow signals fresh advance
By Colin Twiggs
November 12th, 2013 8:30 am ET (8:30 pm AEDT)
Dow Jones Industrial Average broke resistance at 15700, ending the consolidation of recent months and signaling an advance to 16600*. Expect retracement to test the new support level in the next few weeks. Respect would confirm the advance. Penetration of the descending trendline on 13-week Twiggs Money Flow indicates medium-term buying pressure. Reversal below 15500 is unlikely, but would warn of another test of primary support at 14800.
* Target calculation: 15700 + ( 15700 - 14800 ) = 16600
The S&P 500 is testing short-term resistance at 1775. Breakout would offer a short-term target of 1800*. Bearish divergence on 13-week Twiggs Money Flow appears to have ended. Reversal below 1750 is unlikely at present, but would indicate a correction to at least 1710.
* Target calculation: 1775 + ( 1775 - 1750 ) = 1800
CBOE Volatility Index (VIX) below 15 continues to indicate low market risk.
The Nasdaq 100 continues its accelerating up-trend, with Twiggs Money Flow indicating strong buying pressure. Short retracement is likely and breakout above 3400 would suggest another advance. Accelerating trends, or blow-offs, enjoy rapid gains but inevitably end with a sharp fall.
* Target calculation: 2900 + ( 2900 - 2500 ) = 3400
Canada's TSX 60 is consolidating in a narrow range at its medium-term target of 770 after a strong spurt. This is a bullish sign and follow-through above 775 would signal a further advance to 800*. Rising 13-week Twiggs Money Flow suggests buying pressure. Reversal below 740 is most unlikely.
* Target calculation: 740 + ( 740 - 680 ) = 800
TSX 60 VIX is above 15 but still in the low risk range.
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