Market mixed Monday as S&P 500 holds at months-old uptrend line

Stock index, chart, technical analysis, trendlines Stock index, chart, technical analysis, trendlines

Market Snapshot for session ending 4-16-12:

 

Last

Day Change

%Change

S&P 500 Index

1369.57

-.69

-.05%

Dow Jones Industrials

12921.41

+71.82

+.56%

NASDAQ Composite

2988.40

-22.93

-.76%

Value Line Arithmetic Index

2955.87

+1.83

+.06%

Minor Cycle (Short-term trend lasting days to a few weeks) Negative

Intermediate Cycle (Medium trend lasting weeks to several months) Neutral / Negative

Major Cycle (Long-term trend lasting several months to years) Positive / Neutral

Market Overview – What We Know:

  • Market action was mixed Monday with S&P 500 and NASDAQ Composite down marginally while Dow Industrials and Value Line index were up marginally.
  • Short-term trend has become “Oversold” as reflected by our Daily MAAD Ratio (.62) while larger Intermediate Cycle remains “Overbought.”
  • Trading volume on NYSE declined 4% Monday.
  • S&P 500 has found support at uptrend line stretching back to October 2011 low.
  • Intermediate Cycle has become increasingly vulnerable as short-term losses have moved index pricing toward lower edge of defined 10-Week Price Channels (1340.58 / S&P 500) and downside “failsafe” levels of trend in effect since last October.
  • S&P 500 would need to better 1422.38 at April 2 intraday high to create new high for move and best levels since October 2011 lows while buying above upper edge of 10-Day Price Channel (1404.43 / Tuesday) would occur first.
  • Average price per share on NYSE Monday rose by 47 cents. Highest recent Average Price level was reached March 15 at $61.48.
  • MAAD was flat Monday with 10 issues higher and 10 lower.
  • Daily CPFL was negative Monday by 3.43 to 1. Both Daily and Weekly CPFL remain substantially below indicator resistance high put in place February 2011.

Market Overview – What We Think:

  • Highs made by S&P 500 (1422.38) and Dow Jones Industrials (13297.11) on April 2 are looking increasingly like peak for Intermediate Cycle begun last October 4 (1074.77 / S&P 500).
  • Best guess is that any “return action” over next several sessions in face of short-term “Oversold” conditions will falter this side of April 2 highs and that April 10 lows (1357.38 / S&P 500) could soon be breached on downside.
  • More short-term selling would seriously challenge lower edge of 10-Week Price Channels (1340.58 / S&P 500) while threatening to turn larger Intermediate Cycle negative for first time since last fall.
  • So long as Intermediate Cycle remains positive we cannot rule out possibility bulls will muster enough buying power to keep intermediate trend alive. Nothing but strength above 1422.38 / S&P 500 would re-assert uptrend.
  • Recent failure of Weekly MAAD to better 2011 indicator highs, despite strength in major indexes above similar levels and marginal strength to new highs by Daily MAAD, is ongoing suggestion internal strength of market remains poor and that enthusiasm of Smart Money remains absent.

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stock, index, emini, s&p, cumulative volume, chart

 

Index

Daily/Weekly/Monthly Stops

Weekly

Monthly

 

4/16

4/17

4/18

4/19

4/20

4/20

4/30

S&P 500 Index

BUY
1409.69

BUY
1404.43

BUY
1398.28

BUY
1395.37

BUY
1392.83

BUY
1340.58

SELL
1178.00

Dow Jones Industrials

BUY
13177.02

BUY
13127.78

BUY
13068.85

BUY
13043.49

BUY
13021.93

BUY
12769.45

SELL
11223.60

NASDAQ Composite

BUY3098.26

BUY
3088.69

BUY
3075.85

BUY
3070.13

BUY
3063.19

BUY
2894.43

SELL
2492.41

Value Line Index

BUY
3064.13

BUY
3045.61

BUY
3025.61

BUY
3017.11

BUY
3009.63

BUY
2947.00

SELL
2564.71

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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