As market inches higher, MAAD hits new short-term high

Market Snapshot for session ending 1-12-12:

Market Overview – What We Know:

• Further marginal gains Thursday increased range of Minor Cycle that has been moving higher since December 19 low at 1202.37—S&P 500.
• Short and intermediate-term trends remain positive, but both cycles are toward “Overbought” territory.
• So long as pricing continues to hold above lower edge of 10-day Price Channel (1261.90—S&P 500) and 10-Week Price Channel (1195.82—S&P 500), trends will remain positive.
• S&P 500 is approaching our first upside measured move target at 1310.77.
• Trading volume in S&P 500 was down slightly Thursday.
• MAAD continues to power higher and reached new short-term high Thursday, but MAAD daily Ratio has moved back into extremely “Overbought” territory.
• Movement to new short-term high has infused new life into S&P 500 and broad market, 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 Wednesday by 2.25 to 1 for third day in row. But CPFL has confirmed none of strength since October lows.
• Cumulative Volume remains lackluster on Minor Cycle in both S&P 500 and S&P Emini in that CV in neither issue has better October resistance highs as yet.

Market Overview – What We Think:

• So long as short and intermediate-term trends remain positive, we must allow for further price gains. Considering fact developing “ascending wedge” price pattern is approaching possible end stage, a continuation of rally that began after October lows is a coin toss.
• Continued improvement in MAAD offers hope for bullish cause in that Smart Money is apparently more enthusiastic. But indicator may have gotten ahead of itself since MAAD Daily Ratio is “Overbought
• Lack of 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 and possibly toward first target at 1310.77.
• Hanging over all price action 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.

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