S&P 500 finds support but Nasdaq warns caution

By Colin Twiggs
February 25th, 2013 2:00 a.m. ET (6:00 pm AET)

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The S&P 500 found support at 1500 and is headed for a re-test of resistance at 1525/1530. Bearish divergence on 21-day Twiggs Money Flow warns of mild selling pressure. Breakout above resistance would negate this, while reversal below 1500 and the rising trendline would warn of a correction.

Breach of the secondary trendline (above) would indicate a correction to test primary support at 1350. Recovery of 63-day Twiggs Momentum above 10% would increase likelihood of an upward breakout — with a target of 1750* — while retreat below zero would suggest a primary reversal.

* Target calculation: 1550 + ( 1550 - 1350 ) = 1750

The Nasdaq 100 is weaker, with bearish divergence on 13-week Twiggs Money Flow warning of a primary trend reversal. Breakout below primary support at 2500 would confirm, offering a target of 2100*.

* Target calculation: 2500 + ( 2900 - 2500 ) = 2100

The power which the strong have over the weak, the employer over the employed, the educated over the unlettered, the experienced over the confiding, even the clever over the silly — the forbearing or inoffensive use of all this power or authority, or a total abstinence from it when the case admits it, will show the [holder] in a plain light.

~ Robert E. Lee