Dow and S&P 500 bullish, but Nasdaq cautious

By Colin Twiggs
May 14th, 2014 3:30 am EDT (5:30 pm AET)

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Dow Jones Industrial Average broke resistance at its previous high of 16600, signaling a primary advance to 17500*. Recovery of 21-day Twiggs Money Flow above zero indicates medium-term buying pressure. Reversal below 16500 is unlikely, but would warn of a bull trap.

Dow Jones Industrial Average

* Target calculation: 16500 + ( 16500 - 15500 ) = 17500

The S&P 500 is testing resistance at its previous high of 1900. Breakout would confirm an advance to 1950*. The 21-day Twiggs Money Flow trough above zero indicates long-term buying pressure. Reversal below 1850 is unlikely, but would warn of a bull trap (and correction to test primary support at 1750).

S&P 500

* Target calculation: 1850 + ( 1850 - 1750 ) = 1950

CBOE Volatility Index (VIX) at 12 indicates low risk typical of a bull market.

VIX Index

The Nasdaq 100 broke 3600, suggesting another advance, but only breakout above 3750 would confirm. Bearish divergence on 13-week Twiggs Money Flow and a cross below zero warns of selling pressure. Reversal below 3400 is unlikely, but would warn that a top is forming.

Nasdaq 100

* Target calculation: 3700 + ( 3700 - 3400 ) = 4000

Never let the fear of striking out keep you from playing the game.

~ Babe Ruth