Stock index minor trend weakened by Tuesday losses

Short and Intermediate-term trends remain positive

Market Snapshot for session ending 3-20-12:

 

Last

Day Change

%Change

S&P 500 Index

1405.52

-4.23

-.30%

Dow Jones Industrials

13170.19

-68.93

-.52%

NASDAQ Composite

3074.15

-4.17

-.14%

Value Line Arithmetic Index

3067.82

-22.91

-.74%

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 succumbed to profit taking Tuesday with largest losses registered by Dow 30 and Value Line index.
  • Short and Intermediate-term trends remain positive and “Overbought” with overheated readings now evident in Daily MAAD Ratio at 2.32.
  • NYSE trading volume shrank a marginal 1.5% Tuesday with average share price fading 40 cents to $58.40. Highest recent valuation was last Thursday’s $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 to best bids for move. Nor has Intermediate Cycle Momentum. 
  • Cumulative Volume in S&P 500 and S&P Emini futures contract both rallied to new short to intermediate-term highs Tuesday, but has yet to overcome 2011 highs.
  • Daily Most Actives (MAAD) rallied to new short to intermediate high Tuesday along with CPFL.

Market Overview – What We Think:

  • Monday’s failure by Dow 30 to make new short to intermediate high with other indexes brought follow on weakness Tuesday and could be precursor to further weakness on Minor Cycle which looks vulnerable.
  • Nonetheless, resumption of short to intermediate term strength in major indexes over past several sessions merely re-asserted intermediate-term uptrend begun after October 2011 lows.
  • 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 S&P, Dow 30, and NASDAQ has improved via recent strength, failure in all to overcome major indicator resistance at 2011 highs underscores lack of participation since October, despite price gains.

 

ndex

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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