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

Market Snapshot for session ending 1-12-12:

 

Last

Day Change

%Change

S&P 500 Index

1295.50

+3.02

+.23%

Dow Jones Industrials

12471.02

+21.56

+.17%

NASDAQ Composite

2724.70

+13.94

+.51%

Value Line Arithmetic Index

2819.32

+15.11

+.54%

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 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.
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:

  • 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.

Click charts to enlarge

Next page: Indicator review

Page 1 of 2 >>
Comments
comments powered by Disqus
Check out Futures Magazine - Polls on LockerDome on LockerDome