Indexes, indicators mixed on market advance vs. 2011 highs

Market Snapshot for session ending 2-16-12:

 

Last

Day Change

%Change

S&P 500 Index

1358.04

+14.81

+1.10%

Dow Jones Industrials

12904.08

+123.12

+.96%

NASDAQ Composite

2959.85

+44.01

+1.51%

Value Line Arithmetic Index

3038.83

+47.98

+1.60%

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:

  • Major indexes posted modest gains Thursday.
  • S&P 500 rallied to new short-term high, but remains below 5-2-11 peak at 1370.58. Dow Industrials did not make ne short-term high, but remain above 5-2-11 high. NASDAQ made new high and remains above 5-2-11 high. Value Line index rallied to new short-term high, but holds nearly 80 points below 5-2-11 high.
  • Trading volume shrank by less than 2% in S&P 500 Thursday.
  • Short and Intermediate-term trends remain “Overbought” based on S&P price, but MAAD Daily Ratio has moved lower from “Overbought” to “Neutral” and possible zone of opportunity on short-term trend.
  • Weakness below lower edge of 10-Day Price Channel (1333.74—Friday) would suggest beginning of end of Minor Cycle trend in effect since December low (1202.37).
  • Short-term Momentum in S&P 500 remains marginally positive, but could easily turn negative.
  • Daily MAAD was positive Thursday by 19 to 1, but did not make a new short-term high with S&P 500. Indicator continues to hold below its February 8 short-term high.
  • Cumulative Volume (CV) in both S&P 500 and S&P Emini futures contract made new short-term highs Thursday, but CV in both remains well below 2011 highs.
  • Daily CPFL made new short-term high Thursday after breaking above late October resistance on Tuesday. Indicator remains substantially below 2-25-11 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 short-term rally underway since December 19 low (1202.37) is toward end point.
  • So long as prices do not break below edge of 10-Day Price Channel (1333.74--Friday), market bias will remain deciding factor.
  • 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, we would need to see Minor Cycle decline substantially while threatening 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 internal “health” as measured by indicators will likely determine staying power of pricing. Higher prices require indicator confirmation or strength is suspect.

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