Dow and S&P 500 remain bullish
By Colin Twiggs
July 29th, 2014 3:30 am EDT (5:30 pm AEST)
Dow Jones Industrial Average found support at 16950, with long tails indicating short-term buying pressure. Recovery above 17075 would indicate a fresh advance; above 17150 would confirm. A close below 16950 is less likely, but would warn of a correction to 16500. The decline of 21-day Twiggs Money Flow indicates mild selling pressure typical of a consolidation.
* Target calculation: 16500 + ( 16500 - 15500 ) = 17500
The S&P 500 also displays a long tail indicative of buying pressure. Recovery above 1985 would indicate another attempt at 2000. Further consolidation below the 2000 resistance level is likely. Reversal below 1950, however, would warn of a correction to 1900.
* Target calculation: 1500 + ( 1500 - 750 ) = 2250
The CBOE Volatility Index (VIX), trading at low levels last seen in 2005/2006, is typical of a bull market.
Canada's TSX 60 is testing its 2008 high at 900. Rising 13-week Twiggs Money Flow troughs above zero indicate strong buying pressure. Expect resistance at 900, but this is unlikely to hold. Reversal below the rising (secondary) trendline is not expected, but would warn of a correction to 800/820.
In this world, the optimists have it, not because they are always right, but because they are positive. Even when wrong, they are positive, and that is the way of achievement, correction, improvement, and success. Educated, eyes-open optimism pays; pessimism can only offer the empty consolation of being right.
~ David Landes, economic historian