Dow heading for 17000
By Colin Twiggs
August 19th, 2014 3:30 am EDT (5:30 pm AEST)
Dow Jones Industrial Average is headed for another test of 17000/17100 after finding support at 16400/16500. Recovery of 13-week Twiggs Money Flow above its July high would indicate that buyers are back in control. Breakout above 17100 would offer a target of 17500*. Reversal below 16400 is unlikely, but would warn of a test of the primary trendline at 16000.
* Target calculation: 16500 + ( 16500 - 15500 ) = 17500
The S&P 500 followed through above Friday's high of 1965, suggesting another attempt at 2000. Completion of a trough above zero on 21-day Twiggs Money Flow would confirm buying pressure. Breakout above 2000 would offer a target of 2250*, but expect markets to remain cautious because of current geopolitical tensions. Reversal below 1950 is unlikely, but would warn of another test of support at 1900.
* Target calculation: 1500 + ( 1500 - 750 ) = 2250
Low CBOE Volatility Index (VIX) readings are typical of a bull market.
'Ave you 'eard o' the Widow at Windsor
With a hairy gold crown on 'er 'ead?
She 'as ships on the foam—she 'as millions at 'ome,
An' she pays us poor beggars in red.
~ Rudyard Kipling, The Widow at Windsor (1892)