S&P, Nasdaq hit new highs for move, but Dow falters

Short and Intermediate-term trends remain positive

Market Snapshot for session ending 3-19-12:

 

Last

Day Change

%Change

S&P 500 Index

1409.75

+5.58

+.40%

Dow Jones Industrials

13239.13

+6.50

+.05%

NASDAQ Composite

3078.32

+23.06

+.75%

Value Line Arithmetic Index

3090.73

+16.24

+.53%

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:

  • Major indexes, excepting Dow Jones Industrial Average, rally to new short to intermediate-term highs Monday.
  • Short and Intermediate-term trends remain positive, but “Overbought.”
  • Trading Volume on NYSE shrank by 56.4% compared to Friday’s activity while average price per share rose .11 to 58.90 even though best average price since October lows was last Thursday’s high valuation of $61.48.
  • Based on price, both Minor and Intermediate Cycles remain “Overbought.”
  • Short-term Momentum has confirmed none of recent strength in any of major indexes.
  • Cumulative Volume in S&P 500 and S&P Emini futures contract both rallied to new short to intermediate-term highs Monday, but have yet to overcome 2011 highs.
  • Daily Most Actives (MAAD) rallied to new short to intermediate high Monday as Daily MAAD Ratio moved into moderately “Overbought” territory at 1.80.
  • Daily CPFL rallied Monday to new short-term high and best level since December 19 indicator low. But neither Daily nor Weekly CPFL is anywhere near surpassing major resistance at 2011 indicator highs.

Market Overview – What We Think:

  • While Monday’s failure by Dow 30 to make new short to intermediate high with other indexes may be a very small bit of negative ointment in current rally, faltering of blue chip index could be sign short-term trend is losing upside steam.
  • Nonetheless, resumption of short to intermediate term strength in major indexes over past several sessions has merely re-asserted intermediate-term uptrend begun after October 2011 lows.
  • But failure of Momentum on both short and intermediate cycles could be sign recent bout of strength is abating. Fact that market is “Overbought” is helpful even though measurements are not definitive since “Overbought” readings can stay that way. It is reversals of those conditions that count, not the extreme conditions themselves.
  • And while Cumulative Volume (CV) in both S&P, Dow 30, and NASDAQ has improved via recent strength, CV in none of major indexes is anywhere near overcoming major indicator resistance at 2011 highs. That failure underscores lack of participation since October, despite price gains.

 

Index

Daily / Weekly / Monthly Stops

Weekly

Monthly

   3/19  3/20  3/21  3/22  3/23  3/23  3/31

S&P 500 Index

SELL1357.79

SELL1360.14

SELL1365.66

SELL1371.22

SELL1377.87

SELL1299.77

SELL1189.77

Dow Jones Industrials

SELL12863.34

SELL12876.89

SELL12929.20

SELL12977.92

SELL13033.64

SELL12494.26

SELL11271.99

NASDAQ Composite

SELL2950.94

SELL2958.93

SELL2971.50

SELL2985.32

SELL2999.78

SELL2766.84

SELL2517.37

Value Line Index

SELL2962.87

SELL2968.54

SELL2980.64

SELL2992.47

SELL3008.95

SELL2845.49

SELL2612.10

Note: Stop levels, a function of the extant trend, are based on the trailing moving average price channels for the Highs or the Lows of an index. Whether or not a specific index is suggesting a “Buy” or Sell” is determined by whether or not index prices are above or below the current channel Stop levels. Stop levels should only be used as an entry or exit guide and in conjunction with other market entry and exit strategies.

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