Indexes fade Tuesday, but MAAD oversold and CPFL stronger

S&P 500 must better 1422.38 at April 2 intraday high

Market Snapshot for session ending 4-3-12:

 

Last

Day Change

%Change

S&P 500 Index

1413.38

-5.66

-.40%

Dow Jones Industrials

13199.55

-64.94

-.49%

NASDAQ Composite

3113.57

-6.13

-.20%

Value Line Arithmetic Index

3075.30

-17.04

-.55%

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:

  • Major indexes succumb to modest profit-taking Tuesday, But Minor Cycle remains positive nonetheless.
  • S&P 500 must better 1422.38 at April 2 intraday high to create new high for move and best levels since October 2011 lows.
  • Trading Volume on NYSE increased by nearly 7% Tuesday as price of average NYSE share rose 18 cents to $59.02. Highest recent average share price was hit March 15 at $61.48.
  • Short and Intermediate Cycle trends based on price remain “Overbought,” but MAAD Daily Ratio has dipped into “Oversold” territory (.81) and toward level that has often coincided with short-term low.
  • Selling below lower edge of 10-Day Price Channel (1398.07—S&P 500 / Wednesday) 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).
  • MAAD declined Tuesday with net selling bias of 2 issues up and 18 down.
  • Daily CPFL rallied sharply Tuesday on ratio of 5.30 to one as indicator rallied to new short-term high and best level since December 19 low. But neither Daily nor Weekly series is anywhere near overcoming major resistance at February 2011 highs.

Market Overview – What We Think:

  • Selling in major indexes Tuesday created increasingly tentative tone on Minor Cycle, but move toward ”Oversold” territory by MAAD Daily Ratio and strength in CPFL could mean market is setting up for yet another near-term, upward bounce.
  • Nothing but weakness below lower edge of 10-Day Price Channels would suggest end of Minor Cycle positive (1398.07 – S&P 500 / Wednesday).
  • So long as buyers remain eager to pick up “bargains” on weakness, short to intermediate trend will remain viable.
  • There is no denying fact, however, that 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.

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stock, index, s&p, technical analysis, volume

emini, s&p, volume, index

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.

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