Stock's snail race continues against resistance

Market Snapshot for session ending 12-7-11:

 

Last

Day Change

%Change

S&P 500 Index

1261.01

+2.54

+.20%

Dow Jones Industrials

12196.37

+46.24

+.36%

NASDAQ Composite

2649.21

-.35

-.01%

Value Line Arithmetic Index

2724.17

+4.54

+.17%

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:

  • Market continues to inch higher, but S&P still needs to better October 27 intraday high (1292.66) to reassert Intermediate Cycle uptrend.
  • All cycles on short-term trend have moved back toward moderately “Overbought” levels.
  • Most Actives Advance/Decline Line (MAAD) was positive Wednesday with 15 issues positive and 4 was negative. MAAD Daily Ratio continues to move toward moderately “Overbought” levels.
  • MAAD on longer term cycle remains close to major cycle low created in March 2009. Weekly MAAD Ratio was last near “Neutral.”
  • Call/Put Dollar Value Flow Line (CPFL) was negative Wednesday for fifth session in row. Put Dollar Volume exceeded Call Dollar Volume by 1.08 to 1. CPFL has remained in net negative trend since February 25, 2011 and has confirmed none of recent short-term rally.
  • Cumulative Volume in both S&P 500 and S&P Emini futures contract has remained in synch with pricing since October low, but neither issue on longer term and since May 2011 high has performed as well as index pricing.
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:

  • S&P 500 continues to threaten on upside via incremental gains, but bellwether must rally above 1292.66 to suggest resumption of Intermediate Cycle uptrend.
  • Until that resistance point is overcome by new buying, staying power of short-term uptrend remains in doubt.
  • There is also developing issue in that moderately “Overbought” short-term readings have begun to develop across indicator spectrum.
  • Given lingering resistance market may simply fail to overcome major resistance up to 1370.58—S&P 500 and Intermediate Cycle top could be created somewhere this side of there. Scenario would suggest all price strength since October lows has been bear market retracement.
  • If more gains follow, however, and 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.

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