S&P 500 advances towards 2000
By Colin Twiggs
June 10th, 2014 4:00 am EDT (6:00 pm AEST)
Research & Investment: Performance update
Our ASX200 Prime Momentum strategy returned +28.56%* for the 12 months ended 31st May 2014, outperforming the benchmark ASX200 Accumulation Index by +12.11%.
The S&P 500 Prime Momentum strategy has been running seven months, since November 2013, and returned 10.00%* for the period, compared to 10.77% for the S&P 500 Total Return Index.
A sell-off of momentum stocks affected performance in April, but macroeconomic and volatility filters indicate low risk typical of a bull market and we maintain full exposure to equities.
* Results are unaudited and subject to revision.
The S&P 500 has reached its initial target of 1950*. Steeply rising 21-day Twiggs Money Flow indicates strong medium-term buying pressure. Retracement to test support at 1925 is expected. Respect of 1920 would suggest a strong up-trend and an advance to 2000.
* Target calculation: 1850 + ( 1850 - 1750 ) = 1950
CBOE Volatility Index (VIX) below 12 indicates low risk typical of a bull market.
The Nasdaq 100 broke resistance at 3700/3750, signaling an advance to 4000*. Rising 21-day Twiggs Money Flow again indicates strong medium-term buying pressure. Reversal below 3700 is unlikely, but would warn of another correction.
* Target calculation: 3700 + ( 3700 - 3400 ) = 4000
A monthly chart shows Canada's TSX 60 headed for its 2008 high of 900 after breaking resistance at 820. Bearish divergence on 13-week Twiggs Money Flow appears secondary, in line with the medium-term consolidation, but a further decline would warn of a correction. Reversal below support at 830 and the rising trendline is unlikely, but would indicate that the primary trend is slowing.
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