Stock market stalls again below statistical resistance

Market Snapshot for session ending 10-19-11:

 

Last

Day Change

%Change

S&P 500 Index

1209.88

-15.50

-1.26%

Dow Jones Industrials

11504.62

-72.42

-.63%

NASDAQ Composite

2604.04

-53.38

-2.01%

Value Line Arithmetic Index

2575.05

-46.84

-1.79%

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:

  • Market succumbed, yet again, to profit taking Wednesday with S&P 500 prices stalling in face of 200-day exponential moving average now acting as resistance (1234.13).
  • Trading volume in S&P 500 diminished by just under 11%.
  • Minor Cycle statistics remain extremely “Overbought” as measured by short-term Momentum and our two proprietary Trading Oscillators. But in new trend “Overbought” readings can persist.
  • CPFL was positive Tuesday by 1.93 to 1 on heels of Monday’s new Intermediate Cycle low.
  • MAAD was negative Wednesday with 3 issues higher and 17 negative. MAAD was last within about 25 issues of penetrating downtrend line stretching back to March 3 indicator high, but still decidedly below actual March high.
  • Cumulative Volume in both S&P 500 and S&P Emini futures contract remains weaker than S&P pricing.
  • 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 offering upside potential.
  • “Overbought” short-term statistics could result in corrective action within context of developing Intermediate Cycle positive.
  • Intermediate Cycle at 1232.07 holds for rest of week. S&P slightly fractured that level on Tuesday via strength to 1233.10 before pulling back.
  • Break above Price Channel would go a long way toward corroborating 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.

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