Stock market perks higher, coin still flipping

Market Snapshot for session ending 1-3-12:

 

Last

Day Change

%Change

S&P 500 Index

1277.06

+19.46

+1.55%

Dow Jones Industrials

12397.38

+179.82

+1.47%

NASDAQ Composite

2648.72

+43.57

+1.67%

Value Line Arithmetic Index

2739.7

+44.09

+1.64%

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

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

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

Market Overview – What We Know:

  • Major indexes post strong gains during first session of trading year.
  • Dow Jones Industrial Average makes new short to intermediate-term high, but S&P 500, NASDAQ, and Value Line index have yet to better minor resistance at October 27 highs (1292.66—S&P 500)
  • Short and intermediate trends in S&P 500 remain positive.
  • Major Cycle in S&P remains fractionally positive with long-term Momentum just above “Neutral.”
  • S&P continues to face major resistance stretching nearly 100 points higher to May high at 1370.58, level that must be overcome if Major Cycle trend is to be re-asserted.
  • MAAD on daily trend remains in synch with S&P on upside, but indicator has not performed as well, relatively, as has S&P since October lows. Weekly MAAD remains anemic after hitting new short-term low week ending November 25 and despite better index pricing.
  • CPFL has shown some marginal life lately, but indicator continues to hold not far above new lows made October 19. CPFL has confirmed none of market’s strength since October lows.
  • Cumulative Volume (CV) has kept in step with market since October lows, but longer-term price/volume relationship looks weak.
Index Daily / Weekly / Monthly Stops Weekly Monthly
1/2 1/3 1/4 1/4 1/6 1/6 1/31

S&P 500
Index

SELL
1226.23

SELL
1233.58

SELL
1237.81

SELL
1241.71

SELL
1246.28

SELL
1185.22

BUY
1336.70

Dow Jones
Industrials

SELL
11944.71

SELL
12010.95

SELL
12047.60

SELL
12082.13

SELL
12121.22

SELL
11404.48

BUY
12500.72

NASDAQ
Composite

SELL
2561.12

SELL
2570.69

SELL
2575.55

SELL
2581.21

SELL
2587.74

SELL
2530.52

BUY
2829.75

Value Line
Index

SELL
2627.00

SELL
2642.98

SELL
2651.35

SELL
2658.92

SELL
2669.31

SELL
2536.46

BUY
3054.65

Market Overview – What We Think:

  • Tuesday’s gains are in synch with our supposition market could see further gains on short to intermediate term trend over the next few weeks.
  • Upside profit targets for S&P 500 at 1310.77 and 1376.55 come into view via measured moves from October lows.
  • We suspect eventual peak in S&P on Intermediate Cycle will fall somewhere between two targets and shy of new highs above 1370.58 at May peak and level that must be bettered to re-assert Major Cycle advance begun in March 2009.
  • Possible stopping point for rally in effect since October lows could be before 1336.70 and upper edge of 10-Month Price Channel in effect for all of January.
  • Odds are good that even if market is somehow able to reach new highs, none of our key indicators will confirm such strength to suggest staying power of rally could be highly suspect and could turn out to be a classic ‘draw play” for unwary buyers.
  • Volume, possible deciding factor in bullish equation, has been anemic of late.

Click charts to enlarge

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