Stocks look better on Minor Cycle, MAAD confirms

Market Snapshot for session ending 1-10-12:

 

Last

Day Change

%Change

S&P 500 Index

1292.08

+11.38

+.89%

Dow Jones Industrials

12462.47

+69.77

+.56%

NASDAQ Composite

2702.50

+25.93

+.97%

Value Line Arithmetic Index

2788.27

+37.16

+1.35%

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:

  • Further buying and marginal gains Tuesday reinforced positive tone of short and intermediate trends.
  • Via intraday buying, S&P bettered October 27 high at 1292.66 and infused more positivity into larger Intermediate Cycle.
  • MAAD rose to another new short-term high and has recovered about 50% of its losses since peaking early last March while S&P has come back about 65%. MAAD Daily Ratio remains moderately “Overbought.”
  • Trading volume in S&P 500 increased about 22% Tuesday.
  • Movement to new short-term high in S&P 500has breathed some new life into S&P 500, but until index overcomes major resistance at May high (1370.58), all strength must be regarded as “return action” in larger cycle negative.
  • CPFL was positive Tuesday by 2.15 to 1 and indicator continues to flirt with positive levels. But CPFL has confirmed none of strength since October lows. Indicator was last holding only slightly above new lows made December 19.
  • Cumulative Volume remains lackluster on Minor Cycle and has not made new short-term highs as has S&P 500.
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:

  • Further strength in broad market Tuesday with additional positive tone from MAAD after indicator lead market on way up with new highs Monday, has infused short- to intermediate-term with some new life.
  • While price gains are encouraging, lack on confirming action in Cumulative Volume (CV) makes us continue to wonder if rally underway since October lows could soon play out as “ascending wedge” price pattern is completed somewhere this side of 1336.70—S&P 500.
  • Hanging over all price action, however, is major resistance high at May peak (1370-58—S&P 500) that must be overcome if bull market begun in March 2009 is to resume in earnest. Failing that, all strength back toward that level will have to be viewed as mere “return action” in larger cycle negative.
  • If such strength to new highs does occur, we also think it is unlikely any of our key indicators will confirm new highs.

Click charts to enlarge

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