US and Canada: bear trap?

By Colin Twiggs
June 26th, 2012 1:00 a.m. ET (5:00 p.m. AET)

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The S&P 500 retracement breached support at 1330, indicating a false breakout. Reversal of 21-day Twiggs Money Flow below zero would warn of a bear trap, while breach of support at 1270 would confirm another decline — with a target of 1160*.

S&P 500

* Target calculation: 1260 - ( 1360 - 1260 ) = 1160

Nasdaq 100 monthly chart shows an intact up-trend despite slowing momentum. Respect of support at 2400 (and the zero line by 63-day Twiggs Momentum) would indicate another primary advance. Penetration of the rising trendline, however, would warn that a top is forming.

Nasdaq 100

* Target calculation: 2800 + ( 2800 - 2400 ) = 3200

Canada's TSX 60 shows similar weakness, on the daily chart, to the S&P 500. Rising 21-day Twiggs Money Flow, however, indicates support at 640. Respect would suggest that a bottom is forming — strengthened if the index recovers above the declining trendline. Breach of support, on the other hand, would signal a decline to 600*.

TSX 60

* Target calculation: 640 - ( 680 - 640 ) = 600

It is easier to make our wishes conform to our means than to make our means conform to our wishes.

~ Confederate General Robert E. Lee