S&P 500 hesitancy continues

By Colin Twiggs
December 11th, 2012 10:00 p.m. ET (2:00 p.m. AET)

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The US remains hesitant under the uncertainty of fiscal cliff negotiations. The S&P 500 broke medium-term resistance at 1425 but a tall shadow on today's candle indicates short-term selling pressure. Expect a test of the new support level before further advances signaled by medium-term buying pressure on 21-day Twiggs Money Flow (holding above zero). Respect of 1425 would signal an advance to the September/October high of 1475.

S&P 500

* Target calculation: 1475 + ( 1475 - 1350 ) = 1600

The Nasdaq 100 weekly chart is testing medium-term resistance at 2700. Breakout would signal an advance to 2800/2900. Falling 63-day Twiggs Momentum, however, warns of a primary down-trend; strengthened if the indicator reverses below zero. Profit-taking on stocks like AAPL, to recognize capital gains ahead of fiscal cliff measures, may be adding to selling pressure.

Nasdaq 100

* Target calculation: 2450 - ( 2900 - 2450 ) = 2000

When designing governmental institutions we must assume that all men are knaves, and that the appropriate constraints are built in to ward off knavish behaviour even if knaves are in power.

~ David Hume, Scottish philosopher (1711 - 1776)