Stock market re-asserts positive intermediate trend

Market Snapshot for session ending 10-18-11:

 

Last

Day Change

%Change

S&P 500 Index

1225.38

+24.52

+2.04%

Dow Jones Industrials

11577.05

+180.05

+1.58%

NASDAQ Composite

2657.43

+42.51

+1.63%

Value Line Arithmetic Index

2621.90

+68.38

+2.68%

Minor Cycle
(Short-term trend lasting days to a few weeks)
Positive / Neutral

Intermediate Cycle
(Medium trend lasting weeks to several months)
Neutral / Positive

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

Market Overview – What We Know:

  • Major portion of Monday’s losses was recovered Tuesday as Intermediate Cycle gained further credibility on upside.
  • Trading volume in S&P 500 rose 36%.
  • Minor Cycle statistics remain extremely “Overbought” as measured by short-term Momentum and our two Trading Oscillators. But in new trend “overbought” readings can persist.
  • CPFL was positive Tuesday by 2.62 to 1 after Monday’s new Intermediate Cycle low.
  • MAAD was positive Tuesday with 19 issues up and none down. MAAD is within striking range of downtrend line stretching back to March 3 indicator high. MAAD could fracture that line with another 20 positive issues.
  • Cumulative Volume in both S&P 500 and S&P Emini futures contract remains weaker than S&P pricing although there was marginal improvement in both S&P 500 and S&P Emini CV data Tuesday.
  • Major Cycle Momentum remains marginally negative in all of major indexes.

Market Overview – What We Think:

  • Intermediate Cycle continues to hold toward “Oversold” territory while underscoring upside potential, but “Overbought” short-term statistics could result in corrective action within context of developing Intermediate Cycle positive.
  • Via intraday price action Tuesday, upper edge of Intermediate Cycle at 1232.07 was fractured before S&P 500 prices fell back. If intermediate uptrend is continued odds are good Price Channel high will be penetrated to suggest a confirmation of Intermediate Cycle positive.
  • Significant overhead looms from 1255 in S&P 500 up to May intermediate high at 1370.58.
  • Fact that Cumulative Volume remains weaker than prices (S&P 500 and S&P Emini futures contract) is suggestion market internals remain tentative.
  • Similarly, recent lackluster performance by CPFL could be an indication recent strength will not have longer-term staying power.

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