Stock market selling threatens positive minor cycle

Intermediate cycle at lower edge of 10-week price channel

Market Snapshot for session ending 3-22-12:

 

Last

Day Change

%Change

S&P 500 Index

1392.78

-10.11

-.72%

Dow Jones Industrials

13046.14

-78.48

-.60%

NASDAQ Composite

3063.32

-12.00

-.39%

Value Line Arithmetic Index

3040.51

-28.62

-.93%

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 in major indexes Thursday put short-term uptrend initiated March 13 in jeopardy, given fact index pricing is moving downward toward lower edge of defined 10-Day Price Channels (1377.87—S&P 500 / Friday).
  • Intermediate Cycle at lower edge of 10-Week Price Channel would be in jeopardy through March 23 until 1299.77, and for week ending March 30 until 1313.50.
  • Short and Intermediate-term trends remain positive, but statistically “Overbought.”
  • Trading volume on NYSE rose nearly 5% Thursday while price of average share on NYSE dropped 6 cents to $58.26. Highest recent valuation was March 15 at $61.48.
  • Short-term Momentum has confirmed none of recent strength in any of major indexes to recent best bids for move. Nor has Intermediate Cycle Momentum.
  • Daily Most Actives (MAAD) faded with market Thursday, but remains above uptrend line stretching back to December lows. Indicator remains toward “Overbought” levels.
  • CPFL was slightly negative Thursday, but remains in a small uptrend initiated after December lows.

Market Overview – What We Think:

  • Further selling in major indexes Thursday cast doubts on weakening Minor Cycle and also on larger Intermediate Cycle that remains “Overbought” and mature, given fact Intermediate Cycle rally has been underway since October 4 intraday lows. 
  • Failure of Momentum on both short and intermediate cycles could be sign pricing is about to get in synch with indicators that have been detracting from market strength for weeks.
  • “Overbought” statistics that have been signaling a top in pricing could soon be vindicated via market weakness. 
  • While Cumulative Volume (CV) in S&P, Dow 30, and NASDAQ has improved since October lows, failure in all to overcome major indicator resistance at 2011 highs underscores lack of net participation since October. 

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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