S&P fades at downtrend line, must surpass 1292.66

Market Snapshot for session ending 12-1-11:

 

Last

Day Change

%Change

S&P 500 Index

1244.58

-2.38

-.19%

Dow Jones Industrials

12020.03

-25.64

-.21%

NASDAQ Composite

2626.20

+5.85

+.22%

Value Line Arithmetic Index

2677.43

-13.36

-.50%

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

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

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

Market Overview – What We Know:

  • S&P 500 remains stuck right at short-term downtrend line stretching back to October 27 intraday and short-term resistance high (1292.66). Trendline crossover point on upside is at about 1250.00. S&P must better that level and then 1292.66 to re-assert Intermediate Cycle advance begun after October 4 low (1074.77).
  • Volume in S&P 500 sank Thursday by 32% relative to Wednesday’s levels.
  • Most of our short-term trend indicators have moved back to “Neutral” from recent deeply “Oversold” levels.
  • Wednesday’s sharp gain caused S&P 500 to rally above upper edge of 10-Day Price Channel (1233.89), a positive first sign on Minor Cycle.
  • Most Actives Advance/Decline Line (MAAD) was neutral Thursday. MAAD Daily Ratio remains deeply “Oversold.”
  • Call/Put Dollar Value Flow Line (CPFL) was negative Thursday by 1.11 to 1. Indicator remains decidedly lackluster relative to index prices.
Index Daily/Weekly/Monthly Stops Weekly Monthly
11/28 11/29 11/30 12/1 12/2 12/2 12/31

S&P 500
Index

BUY
1251.75

BUY
1244.11

BUY
1233.89

BUY
1223.43

BUY
1211.88

SELL
1154.28

BUY
1337.19

Dow Jones
Industrials

BUY
12051.40

BUY
11999.40

BUY
11911.75

BUY
11820.94

BUY
11718.50

SELL
11038.44

BUY
12488.49

NASDAQ
Composite

BUY
2661.42

BUY
2637.09

BUY
2614.62

BUY
2590.07

BUY
2563.81

BUY
2639.20

BUY
2824.47

Value Line
Index

BUY
2714.00

BUY
2696.35

BUY
2671.55

BUY
2645.20

BUY
2613.81

SELL
2451.94

BUY
3062.69

Market Overview – What We Think:

  • Until S&P 500 can decisively break above month-old downtrend line stretching back to October 27 intraday and short-term high at 1292.66, staying power of short-term uptrend remains in doubt.
  • But, if it turns out pullback from October 27 to November 25 was a “B” leg correction in an A-B-C rally begun after October 4 low, then upside measured move to 1376.55 comes into view. Level would create a new high for move since March 2009 and would better May 2011 peak by several points.
  • But with all of our key indicators (MAAD, CPFL, CV, and Momentum) lagging pricing, move could prove to be massive market hook.
  • Another possibility is that market simply fails to overcome major resistance up to 1370.58 and Intermediate Cycle top is created somewhere this side of there. That scenario would feed into presumption all price strength since October lows has been bear market retracement.
  • Key to current Intermediate Cycle uptrend will be market’s ability to over come massive resistance stretching up to May high at 1370.58.

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