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Nasdaq 100: Expect profit-taking

By Colin Twiggs
July 15th, 2014 3:00 am EDT (5:00 pm AEST)

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 Nasdaq 100 is headed for a test of the psychological level of 4000* at roughly the same time the S&P 500 is testing 2000. Expect resistance at these levels, but profit-taking is unlikely to be sufficient to halt the primary up-trend. Rising 13-week Twiggs Money Flow indicates medium-term buying pressure.

Nasdaq 100

* Target calculation: 3700 + ( 3700 - 3400 ) = 4000

Dow Jones Industrial Average recovered above 17000, indicating the recent retracement is over. Follow-through above 17100 would offer a target of 17500*. Recovery of 21-day Twiggs Money Flow above the descending trendline indicates selling pressure has ended. Reversal of the index below its (secondary) rising trendline at 16900 is unlikely, but would warn of another correction.

Dow Jones Industrial Average

* Target calculation: 16500 + ( 16500 - 15500 ) = 17500

Russell 2000 small caps retreated from resistance at 12.0/12.1. Declining 13-week Twiggs Momentum shows the up-trend is slowing, while reversal below zero would warn of a primary down-trend. Breach of support at 10.8/11.0 would confirm. Recovery above 12.1, however, remains equally likely and would offer a target of 13.0.

Russell 2000

* Target calculation: 12 + ( 12 - 11 ) = 13

Canada's TSX 60 continues to perform strongly, with rising 13-week Twiggs Money Flow troughs above zero indicating strong buying pressure. Expect a test of the 2008 high at 900. Reversal below the rising (secondary) trendline is unlikely, but would warn of a correction.

TSX 60

When it shall be said in any country in the world, my poor are happy; neither ignorance nor distress is to be found among them; my jails are empty of prisoners, my streets of beggars; the aged are not in want, the taxes are not oppressive..... When these things can be said, then may the country boast of its constitution and its government.

~ Thomas Paine, The Rights of Man

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