Stock market rises Thursday, but overnight losses erase gains

Market Snapshot for session ending 2-9-12:

 

Last

Day Change

%Change

S&P 500 Index

1351.95

+1.99

+.15%

Dow Jones Industrials

12890.46

+6.50

+.05%

NASDAQ Composite

2927.23

+11.36

+.39%

Value Line Arithmetic Index

3021.42

+.60

+.02%

Minor Cycle
(Short-term trend lasting days to a few weeks)
Positive / Neutral

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 plusses were posted by major indexes Thursday. But overnight trading losses in futures with potential for day session carry over effectively erased all of those day gains.
  • Trading volume was up about 2% in the S&P 500 Thursday.
  • Short and Intermediate-term trends remain “Overbought.”
  • Selling in S&P 500 below lower edge of 10-Day Price Channel (1313.88—Friday) would suggest beginning of end of Minor Cycle advance underway since December 19 short-term low (1202.37—S&P 500).
  • Short-term Momentum in S&P 500 remains marginally positive, but it wouldn’t take much to turn that indicator negative.
  • Daily MAAD pulled back from Wednesday’s new high Thursday with an 11 to 9 count, but could make a new high with ease.
  • Cumulative Volume (CV) in S&P 500 remains above late October resistance highs, but Emini CV remains weak.
  • Daily CPFL was positive by 1.41 to 1 Thursday and has yet to better later October resistance high. CPFL has confirmed none of strength since October lows.
Index Daily / Weekly / Monthly Stops Weekly Monthly
2/6 2/7 2/8 2/9 2/10 2/10 2/29

S&P 500
Index

SELL
1307.12

SELL
1307.47

SELL
1308.56

SELL
1310.92

SELL
1313.88

SELL
1218.64

SELL
1218.82

Dow Jones
Industrials

SELL
12061.93

SELL
12600.07

SELL
12607.49

SELL
12619.51

SELL
12634.75

SELL
11834.14

SELL
11481.71

NASDAQ
Composite

SELL
2780.79

SELL
2785.96

SELL
2794.51

SELL
2805.74

SELL
2822.28

SELL
2558.94

SELL
2592.57

Value Line
Index

SELL
2869.50

SELL
2873.72

SELL
2879.13

SELL
2892.32

SELL
2905.91

SELL
2606.41

SELL
2708.65

Market Overview – What We Think:

  • Plodding nature of market over past several sessions, and despite marginal new highs in Dow 30, NASDAQ, and Daily MAAD, could be an indication Minor Cycle is about to turn lower.
  • Upside failure by majority of our key indicators is strong hint that rally since October lows is not a resumption of the primary bull trend begun in October 2009. More likely scenario is powerful countertrend rally.
  • While it’s difficult to continue holding onto bearish prognosis in the face of higher prices, we can only suggest indicator weakness in the face of price strength has always accrued to benefit of indicators.
  • With major indexes still “Overbought” on both Minor and Intermediate Cycles, there is an inevitability to this market that will not be held in abeyance indefinitely.

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