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Nasdaq Confidence Recovering

By Colin Twiggs
April 20, 2017 8:30 p.m. EDT (10:30 a.m. AEST)

First, please read the Disclaimer.


The Nasdaq 100 respected its long-term rising trendline and is headed for another test of 7000. Breakout above 7000 would signal another advance. Twiggs Money Flow shows a bearish divergence but this appears secondary in nature as Money Flow has so far respected the zero line, warning of a correction rather than a reversal.

Nasdaq 100

The S&P 500 rally is weaker than the Nasdaq but Twiggs Money Flow is stronger. Recovery above 2800 would indicate another test of 3000.

S&P 500

The CBOE Volatility Index for the S&P 500 (VIX) retreated below 20, suggesting that market risk is easing. Twiggs Volatility Index (21-Day) on the S&P 500, however, remains above 1% and would indicate long-term market risk is elevated if the next trough respects the 1% level.

S&P 500 Volatility (VIX)

Bellwether transport stock Fedex has also undergone a sell-off but respected primary support at 225/230, with the primary up-trend intact. Recovery above 260 would be a bullish sign for the economy, suggesting that activity is increasing.

Fedex

At the end of the day, prices are driven by earnings. The reporting season has just started for Q1 2018 and according to S&P "Of the 25 issues (505 in the index) with full operating comparative data 18 beat, 6 missed, and 1 met their estimates; 14 of 24 (66.7%) beat on sales." An acceptable start to the season.

It never was my thinking that made the big money for me. It always was my sitting. Got that? My sitting tight! It is no trick at all to be right on the market. You always find lots of early bulls in bull markets and early bears in bear markets. I've known many men who were right at exactly the right time, and began buying or selling stocks when prices were at the very level which should show the greatest profit. And their experience invariably matched mine—that is, they made no real money out of it. Men who can both be right and sit tight are uncommon.

~ Jesse Livermore in Reminiscences of a Stock Operator

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Disclaimer

Colin Twiggs is director of The Patient Investor Pty Ltd, an Authorised Representative (no. 1256439) of MoneySherpa Pty Limited which holds Australian Financial Services Licence No. 451289.

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