Dow breaks 17000
By Colin Twiggs
July 8th, 2014 3:00 am EDT (5:00 pm AEST)
Research & Investment: Performance update
ASX200 Prime Momentum strategy returned +27.60%* for the 12 months ended 30th June 2014, outperforming the benchmark ASX200 Accumulation Index by +10.17%.
The S&P 500 Prime Momentum strategy has been running eight months, since November 2013, and returned 13.41%* for the period, compared to 13.06% 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.
Dow Jones Industrial Average broke medium-term resistance at 17000 — after reaching 16000 in November last year. Expect retracement to test the new support level at 16950/17000. Mild divergence on 21-day Twiggs Money Flow warns of weak selling pressure. Reversal below 16750 is unlikely, but would indicate a correction.
* Target calculation: 16500 + ( 16500 - 15500 ) = 17500
The Nasdaq 100 is on a bit of a tear, with rising 21-day Twiggs Money Flow indicating medium-term buying pressure. Respect of the rising trendline would suggest a rally to 4000*. Penetration of the trendline is unlikely, but would warn of a correction.
* Target calculation: 3700 + ( 3700 - 3400 ) = 4000
Canada's TSX 60 is also performing strongly, with 21-day Twiggs Money Flow indicating medium-term buying pressure. Expect a test of the 2008 high at 900. Reversal below support at 855 is unlikely, but would warn of a correction.
Tape reading was an important part of the game; so was beginning at the right time; so was sticking to your position. But my greatest discovery was that a man must study general conditions, to size them up so as to be able to anticipate probabilities.
~ Jesse Livermore