Stock's snail race continues against resistance

Market Snapshot for session ending 12-7-11:

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.

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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