Nasdaq makes new high, but S&P 500 cannot

Market Snapshot for session ending 2-13-12:

 

Last

Day Change

%Change

S&P 500 Index

1351.77

+9.13

+.68%

Dow Jones Industrials

12874.00

+72.80

+.57%

NASDAQ Composite

2931.39

+27.51

+.95%

Value Line Arithmetic Index

3012.80

+28.44

+.95%

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:

  • NASDAQ Composite makes new short to intermediate-term high Monday, but S&P 500, Dow 30, and Value Line Index do not, despite broad market strength.
  • Trading volume shrank by about 4% in the S&P 500 Monday.
  • Short and Intermediate-term trends remain “Overbought.”
  • Weakness below lower edge of 10-Day Price Channel (1322.50—Tuesday) would suggest beginning of end of Minor Cycle advance.
  • Short-term Momentum in S&P 500 remains marginally positive, but it wouldn’t take much to turn indicator negative to reverse currently positive Minor Cycle trend.
  • Daily MAAD was positive by 16 to 2 Monday, but strength was not good enough to cause indicator to better its February 8 plot high. Weekly MAAD continues to underperform.
  • Cumulative Volume (CV) in S&P 500 remains above late October resistance highs, but Emini CV remains weak. Both remain substantially weaker than prices relative to May 2011 highs.
  • Daily CPFL was positive Monday by 3.33 to 1. CPFL has yet to better its late October resistance high and has confirmed little of strength since October lows.
Index Daily / Weekly / Monthly Stops Weekly Monthly
2/13 2/14 2/15 2/16 2/17 2/17 2/29

S&P 500
Index

SELL
1318.59

SELL
1322.50

SELL
1326.97

SELL
1331.30

SELL
1333.74

SELL
1230.02

SELL
1218.82

Dow Jones
Industrials

SELL
12664.54

SELL
12690.04

SELL
12718.84

SELL
12748.55

SELL
12756.81

SELL
11938.90

SELL
11481.71

NASDAQ
Composite

SELL
2837.09

SELL
2849.37

SELL
2860.86

SELL
2872.61

SELL
2880.65

SELL
2578.28

SELL
2592.57

Value Line
Index

SELL
2925.40

SELL
2941.29

SELL
2956.08

SELL
2968.44

SELL
2974.61

SELL
2630.47

SELL
2708.65

Market Overview – What We Think:

  • Lateral action of S&P 500 over past several sessions could lead to creation of Minor Cycle high. Lacking a new high in the index, we wonder how much longer short-term trend that has been positive since mid-December will be able to last.
  • Ongoing upside failure of majority of our key indicators is strong indication rally since October lows could prove not to be resumption of the primary bull trend begun in October 2009. More likely scenario could be powerful countertrend rally that might “hook” many investors because of recent flirtations with May 2011 highs.
  • We must continue to suggest market’s true internal “health” is measured and reflected by condition and outlook of our key indicators. Higher prices can occur, but without indicator confirmation, strength is definitely suspect.
  • Ongoing struggle relative to 2011 highs gives us feeling there is certain inevitability about this market that may ultimately not accrue to benefit of bullish crowd.

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