S&P 500 and Nasdaq 100 test key resistance

By Colin Twiggs
August 21st, 2012 4:00 a.m. ET (6:00 p.m. AET)

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The S&P 500 Index is testing resistance at 1420 on the monthly chart. A trough above zero on 13-week Twiggs Money Flow indicates buying pressure. Breakout above 1420 would signal an advance to the 2007 high at 1560*.

S&P 500

* Target calculation: 1420 + ( 1420 - 1280 ) = 1560

The Nasdaq 100 is similarly testing resistance at 2800 on the weekly chart. Breakout would offer a target of 3150*. A 63-day Twiggs Momentum trough above zero indicates continuation of the primary up-trend.

Nasdaq 100

* Target calculation: 2800 + ( 2800 - 2450 ) = 3150

10-Year Treasury Yields recovered above initial resistance at 1.70 percent. Expect an attempt at the primary level of 2.40 percent. The Fed purchased $5 billion of Treasury notes/bonds (nominal) and MBS last week; so they are not the cause of the rise. Investors appear to be flowing out of Treasuries and driving stocks higher.

10-Year Treasury Yields

Nothing great is produced suddenly, since not even the grape or the fig is. If you say to me now that you want a fig, I will answer to you that it requires time: let it flower first, then put forth fruit, and then ripen.

~ Epictetus