Stock market up as MAAD breaks resistance

Market Snapshot for session ending 1-9-12:

 

Last

Day Change

%Change

S&P 500 Index

1280.70

+2.88

+.23%

Dow Jones Industrials

12392.69

+32.77

+.27%

NASDAQ Composite

2676.56

+2.34

+.09%

Value Line Arithmetic Index

2751.10

+13.69

+.50%

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:

  • Small gains characterized index price movement Monday.
  • While S&P 500 remains about 12 points below October 27 intraday and short-term resistance high (1292.66) Daily MAAD broke above similar resistance Monday to re-assert intermediate positive.
  • MAAD strength is suggestion Smart Money has become a bit more positive on market on Minor Cycle. Daily MAAD remains moderately “Overbought.”
  • Trading volume in S&P 500 decreased 7% Monday.
  • Short-term trend continues to look weak in face of major resistance, but so long as short and intermediate term cycles remain positive, further gains cannot be precluded.
  • S&P must better May 2011 high at 1370.58 to re-assert Major Cycle uptrend.
  • CPFL, negative Monday, continues to flirt with positivity, but has confirmed none of strength since October lows. Indicator was last holding only slightly above new lows for move made December 19.
  • Cumulative Volume remains lackluster on Minor and Intermediate Cycle relative to S&P.
Index Daily / Weekly / Monthly Stops Weekly Monthly
1/9 1/10 1/11 1/12 1/13 1/13 1/31

S&P 500
Index

SELL
1246.28

SELL
1250.28

SELL
1255.16

SELL
1258.34

SELL
1261.90

SELL
1195.82

BUY
1336.70

Dow Jones
Industrials

SELL
12121.22

SELL
12154.61

SELL
12201.78

SELL
12228.31

SELL
12254.29

SELL
11529.86

BUY
12500.72

NASDAQ
Composite

SELL
2587.74

SELL
2599.84

SELL
2607.54

SELL
2613.98

SELL
2624.98

SELL
2545.44

BUY
2829.75

Value Line
Index

SELL
2669.31

SELL
2677.81

SELL
2687.51

SELL
2691.62

SELL
2698.58

SELL
2561.44

BUY
3054.65

Market Overview – What We Think:

  • While Monday’s move by MAAD to new short- to-intermediate term high was encouraging, we continue to look with skepticism on Intermediate Cycle rally that has persisted since October lows (1074.77—S&P 500).
  • So long as intermediate trend remains positive, we must defer to “positive” flavor.
  • We continue to believe new highs (above 1370.58—S&P) will not develop, but we cannot rule out such an event so long as Intermediate Cycle remains favorable.
  • If such strength does occur, we do not think any of our key indicators will confirm, a development that could weigh heavily on market pricing.
  • All of major indexes (S&P 500, Dow 30, NASDAQ, and Value Line) have one thing in common in that all have stalled at “Necklines” of Head and Shoulders top initiated early last year.
  • Odds remain good S&P 500 could stall anywhere this side of upper edge of 10-month Price Channel at 1336.70.

Click charts to enlarge

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