Stock market is range bound with indicators still vulnerable

Market Snapshot for session ending 9-29-11:

 

Last

Day Change

%Change

S&P 500 Index

1160.40

+9.33

+.81%

Dow Jones Industrials

11153.98

+143.07

+1.30%

NASDAQ Composite

2480.76

-10.82

-.43%

Value Line Arithmetic Index

2455.87

+29.36

+1.21%

Minor Cycle
(Short-term trend lasting days to a few weeks)
Negative

Intermediate Cycle
(Medium trend lasting weeks to several months)
Negative

Major Cycle
(Long-term trend lasting several months to years)
Neutral / Negative

Market Overview – What We Know:

  • Market as measured by S&P 500 remains range bound between August 31 intraday high (1230.71) and August 9 intraday low (1101.54).
  • Trading activity as measured by Cumulative Volume in S&P 500 and S&P Emini futures contract remains weak relative to pricing.
  • CPFL declined to another new low Thursday with Put Dollar Volume exceeding Call Dollar Volume by 1.60 to 1. Options players remain wary of stock market on long side.
  • MAAD was net positive Thursday with 15 issues up and 5 down, but a net difference of 25 negative issues would force MAAD to a new low for move and its worst level since March 3.
  • Short-term readings including short-term Momentum and our two proprietary Trading Oscillators remain near neutral while Intermediate statistics remain negative, but toward “Oversold” levels.

Market Overview – What We Think:

  • With S&P 500 prices stuck in a trading range (1230.71-11101.54), longer it takes for S&P prices to re-assert Intermediate Cycle negativity with weakness below lower support point, greater are odds an intermediate-term low has been put in place.
  • In other words, recent weakness would be viewed in retrospect as a “test” of early August lows (1101.54-S&P 500).
  • Even if intermediate-term low is put in place, we do not think major resistance (1255-1370.58—S&P 500) would be overcome if rebounding develops.
  • Also, given fact it would take little net selling to push MAAD and Cumulative Volume in both S&P 500 and S&P Emini to new lows for move, market internals remain precarious and vulnerable.

Click charts to enlarge

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