Market gains some, but resistance holds at 1292.66

Market Snapshot for session ending 12-2-11:

 

Last

Day Change

%Change

S&P 500 Index

1257.08

+12.80

+1.03%

Dow Jones Industrials

12097.83

+78.41

+.65%

NASDAQ Composite

2655.76

+28.83

+1.10%

Value Line Arithmetic Index

2722.73

+35.85

+1.33%

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:

  • Stock market as measured by S&P 500 has moved above short-term downtrend line (near 1250) stretching back to October 27 intraday high 1292.66.
  • S&P must rise above 1292.66 to re-assert larger Intermediate Cycle which remains positive.
  • All cycles remain near “Neutral.”
  • Most Actives Advance/Decline Line (MAAD) was higher by 9 to 1 Monday while MAAD Daily Ratio remains near “Neutral.”
  • MAAD on longer term cycle remains precariously close to major cycle low created into March 2009 lows. Weekly MAAD Ratio was last near “Neutral.”
  • Call/Put Dollar Value Flow Line (CPFL) was negative Monday by 1.27 to 1 and has shown no positive confirmation of rally since October low. CPFL has remained in net negative trend since February 25, 2011.
Index Daily/Weekly/Monthly Stops Weekly Monthly
12/5 12/6 12/7 12/8 12/9 12/9 12/31

S&P 500
Index

SELL
1182.12

SELL
1180.78

SELL
1181.34

SELL
1190.58

SELL
1200.41

SELL
1166.98

BUY
1337.19

Dow Jones
Industrials

SELL
11443.89

SELL
11429.53

SELL
11432.12

SELL
11518.28

SELL
11608.78

SELL
11159.44

BUY
12488.49

NASDAQ
Composite

SELL
2513.12

SELL
2505.85

SELL
2514.81

SELL
2529.77

SELL
2547.87

SELL
2502.16

BUY
2824.47

Value Line
Index

SELL
2535.34

SELL
2529.38

SELL
2527.93

SELL
2550.03

SELL
2573.86

SELL
2485.75

BUY
3062.69

Market Overview – What We Think:

  • Until S&P 500 can break above short-term high at 1292.66 to re-assert Intermediate Cycle uptrend begun after October lows, staying power of short-term uptrend remains in doubt.
  • 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 trap for “late to the party” longs.
  • Another possibility is that market simply fails to overcome major resistance up to the 1370.58 level and Intermediate Cycle top is created somewhere this side of there. That scenario would feed into possibility all price strength since October lows has been bear market retracement.
  • Critical to staying power of current Intermediate Cycle uptrend and larger Major Cycle will be market’s ability to overcome massive resistance stretching up to May high at 1370.58.

Click charts to enlarge

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