S&P 500 meets resistance
By Colin Twiggs
February 24th, 2014 6:30 pm ET (10:30 am AEDT)
The S&P 500 encountered stout resistance at 1850, highlighted by today's false breakout. Follow-through above 1860 would indicate that buyers out-number sellers, signaling an advance to 1950*. Reversal below 1825 is unlikely, but would warn of another correction. The long-term trend remains bullish, with repeated 21-day Twiggs Money Flow troughs above the zero line.
* Target calculation: 1850 + ( 1850 - 1750 ) = 1950
CBOE Volatility Index (VIX) below 20 reflects low risk typical of a bull market.
Dow Jones Industrial Average is weaker. Large bearish divergence on 13-week Twiggs Money Flow warns of selling pressure. Reversal below 16000 would warn of a correction to test primary support at 15400.
* Target calculation: 16500 + ( 16500 - 15500 ) = 17500
The Nasdaq 100, on the other hand, remains bullish. Reversal below 3600, especially after last week's doji star candlestick formation, would warn of a test of primary support at 3400. Decline of 13-week Twiggs Money Flow below its recent low would strengthen the signal. Breakout above 3700, however, would offer a target of 3800*.
* Target calculation: 3600 + ( 3600 - 3400 ) = 3800
If you look for perfection, you'll never be content.
~ Leo Tolstoy