Dow, S&P hit new highs for move as indicators vary

Stock market enters its sixth month since establishing Intermediate Cycle low

Market Snapshot for session ending 4-2-12:

 

Last

Day Change

%Change

S&P 500 Index

1419.04

+10.57

+.75%

Dow Jones Industrials

13264.49

+52.45

+.40%

NASDAQ Composite

3119.70

+28.12

+.91%

Value Line Arithmetic Index

3092.34

+26.10

+.85%

Minor Cycle (Short-term trend lasting days to a few weeks) Neutral / 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:

  • Stock market enters its sixth month since establishing Intermediate Cycle low in major indexes last October 4.
  • S&P 500, Dow Industrials hit new highs for move Monday, but NASDAQ Composite and Value Line index do not.
  • Trading Volume on NYSE shrank by nearly 21% Monday as price of average NYSE share rose 45 cents to $58.84. Highest recent average share price was hit on March 15 at $61.48.
  • Short and Intermediate Cycle trends remain positive and “Overbought.”
  • Selling below lower edge of 10-Day Price Channel (1398.03—S&P 500 / Tuesday) would be required to end Minor Cycle uptrend. Intermediate Cycle at lower edge of 10-Week Channel would be threatened with weakness below 1325.12 in S&P 500 (through April 6).
  • Despite new highs for move in S&P 500 and Dow Monday with coincident strength in raw MAAD data (16 up and 3 down) Daily MAAD did not hit new high for move.
  • Daily CPFL rallied to best levels since December 19 lows Monday, but neither Daily nor Weekly series is anywhere near overcoming major resistance at February 2011 highs.

Market Overview – What We Think:

  • Continuing mixed readings on short term, some indexes higher and other not, and variances in indicators suggest possible faltering of Minor Cycle trend.
  • But until prices break below lower edges of define 10-Day Price Channels to suggest end of Minor Cycle positive, possibility remains larger Intermediate Cycle could continue to improve.
  • If buyers remain eager to pick up “bargains” on weakness, short to intermediate trend will remain viable.
  • On other hand, Intermediate Cycle that has been underway since last October 4 is mature, historically, and is due for a correction.
  • Possible clue to future market direction may rest in price of average share on NYSE. Despite recent short to intermediate new highs, highest recent average price ($61.48) was hit back on March 15. Divergence could be sign fewer and fewer issues have been leading market to new highs.
  • Additional fact that Cumulative Volume (CV) remains weaker than index pricing relative to 2011 highs in S&P 500, Dow 30, and NASDAQ Composite underscores lack of strong participation in market over past several months.

Click charts to enlarge

stock, market, cumulative, volume

stock, market, technical, analysis, cumulative, volume

Index

Daily / Weekly / Monthly Stops

Weekly

Monthly

 

4/2

4/3

4/4

4/5

4/6

4/6

4/30

S&P 500 Index

SELL1394.57

SELL1398.03

SELL1398.07

SELL1396.96

SELL1397.66

SELL1325.12

SELL1178.00

Dow Jones Industrials

SELL13096.08

SELL13111.98

SELL13100.76

SELL13084.65

SELL13091.97

SELL12678.02

SELL11223.60

NASDAQ Composite

SELL3056.39

SELL3069.61

SELL3074.77

SELL3075.69

SELL3077.70

SELL2843.04

SELL2492.41

Value Line Index

SELL3045.86

SELL3055.14

SELL3055.05

SELL3051.58

SELL3051.70

SELL2916.13

SELL2564.71

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.

Next page: Indicator review

Page 1 of 2 >>
Comments
comments powered by Disqus
Check out Futures Magazine - Polls on LockerDome on LockerDome