Nasdaq 100 and S&P 500 threaten correction

By Colin Twiggs
May 8th, 2012 5:00 a.m. ET (7:00 p.m. AET)

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The Nasdaq 100 is testing medium-term support at 2630. Reversal of 21-day Twiggs Money Flow below zero warns of a correction; follow-through below Friday's low of 2620 would confirm, offering an initial target of 2400.

The S&P 500 continues to test support at 1350/1370 on the weekly chart after penetrating its rising trendline. Declining 13-week Twiggs Money Flow indicates medium-term selling pressure. Failure of support would signal a correction with an initial target of 1300*, but the primary up-trend is not under immediate threat.

* Target calculation: 1350 - ( 1400 - 1350 ) = 1300

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