S&P 500 and Nasdaq rally

By Colin Twiggs
May 22nd, 2012 1:00 a.m. ET (5:00 p.m. AET)

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The S&P 500 rallied off support at 1290/1300, the 50% Fibonacci retracement level. Respect of resistance at 1350/1360 would indicate a strong correction. Likewise a 21-day Twiggs Money Flow peak below zero would be a strong bear signal. The primary trend remains upward, with support a long way off at 1150.

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

On the weekly chart, the Nasdaq 100 displays a solid bounce off support at 2500 and the rising trendline. Respect of resistance at 2650 would indicate a test of 2400. A 63-day Twiggs Momentum trough above zero would reinforce the primary up-trend, but momentum is falling fast and penetration of the zero line would warn of reversal to a down-trend.

* Target calculation: 2630 - ( 2760 - 2630 ) = 2500

The best way to destroy the capitalist system is to debauch the currency.

~ Vladimir Ilyich Lenin