Stock market can't maintain highs; indexes fade

Market Snapshot for session ending 2-15-12:

 

Last

Day Change

%Change

S&P 500 Index

1343.23

-7.27

-.54%

Dow Jones Industrials

12780.95

-97.33

-.76%

NASDAQ Composite

2915.83

-16.00

-.55%

Value Line Arithmetic Index

2990.84

-14.01

-.47%

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:

  • Losses were evident in all of major indexes Wednesday, but selling was not great enough to negate Minor Cycle advance underway since December 19 lows.
  • Trading volume in S&P 500 rose by 6% Wednesday.
  • Short and Intermediate-term trends remain “Overbought.”
  • Weakness below lower edge of 10-Day Price Channel (1331.30—Thursday) would suggest beginning of end of Minor Cycle uptrend.
  • Short-term Momentum in S&P 500 remains marginally positive, but could easily turn negative.
  • Daily MAAD was negative Wednesday by 4 to 15 and fractured uptrend line with four points of contact stretching back to December low. Weekly MAAD continues to underperform.
  • Cumulative Volume (CV) in S&P 500 remains above late October resistance highs, but Emini CV remains weak.
  • Daily CPFL faded slightly Wednesday after bettering its October 28 resistance high Tuesday. Indicator continues to remain substantially below February 25, 2011 high.
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:

  • Odds are increasing that short-term rally underway since December 19 low (1202.37) is nearly over. Weakness past two sessions and downward movement by MAAD below defined uptrend suggest pressure could then be exerted on larger Intermediate Cycle.
  • Ongoing failure of Cumulative Volume (CV) in S&P 500 and S&P Emini relative to index prices that have been much stronger, underscores our suspicion rally since October lows has lacked internal “fortitude” necessary to sustain this rally on longer term.
  • To prove point, however, we would need to see Minor Cycle decline substantially threaten larger Intermediate Cycle that currently remains positive until 1230.02 and bottom of 10-Week Price Channel.
  • Ultimate status of Intermediate to Major Cycles will be determined once short-term advance ends and bias of indicators relative to pricing is assessed.
  • Market’s true internal “health” as measured by indicators should determine staying power of pricing. Higher require indicator confirmation or strength is suspect.

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