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S&P 500 up-trend as European tensions rise

By Colin Twiggs
March 17th, 2014 4:00 am ET (7:00 pm AEDT)

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 retreated below support at 1850, warning of a correction, but the primary up-trend remains strong. Trend strength is depicted by this weekly chart of Ichimoku Cloud, with a buy signal at the start of 2013 and price holding high above a green cloud indicating trend strength.

S&P 500

Bearish divergence on 13-week Twiggs Money Flow indicates medium-term selling pressure, consistent with a secondary correction, but respect of the rising trendline would signal a healthy up-trend. And recovery above 1850 would offer a target of 1950*.

S&P 500

* Target calculation: 1850 + ( 1850 - 1750 ) = 1950

CBOE Volatility Index (VIX) is rising and a sustained shift above 20 would signal an increase from low to moderate risk.

VIX Index

The Nasdaq 100 also shows bearish divergence on 13-week Twiggs Money Flow, warning of medium-term selling pressure. Breach of the rising trendline would test primary support at 3400, while respect would confirm a healthy up-trend. Recovery above 3650 would offer a target of 3800*.

Nasdaq 100

* Target calculation: 3600 + ( 3600 - 3400 ) = 3800


...This means that we also need to build our home and make it strong and well protected. We see, after all, what is going on in the world. "The Comrade Wolf knows whom to eat, as the saying goes. It knows whom to eat and is not about to listen to anyone, it seems."

~ Vladimir Putin (2006)

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