Stock market perks higher, coin still flipping

Market Snapshot for session ending 1-3-12:

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.

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.

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