Oversold stats erased as S&P faces April 2 high

More short-term selling could challenge lower edge of 10-week price channels

Financial market prices Financial market prices

Market Snapshot for session ending 4-25-12:

 

Last

Day Change

%Change

S&P 500 Index

1390.69

+18.72

+1.36%

Dow Jones Industrials

13090.72

+89.16

+.69%

NASDAQ Composite

3029.63

+68.02

+2.30%

Value Line Arithmetic Index

2999.18

+44.43

+1.50%

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

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:

  • Major indexes, excepting NASDAQ, posted marginal gains Tuesday as short-term “Oversold” conditions continued to correct higher.
  • MAAD Daily ratio was last plotted at .90. Readings toward 1.00 and “Neutral” would be good enough to suggest point for further near-term vulnerability.
  • Selling below lower edge of 10-Week Price Channel at 1351.61—S&P 500 (through 4/27) would be first such weakness below weekly price channel since last fall.
  • NYSE trading volume declined nearly 4% Tuesday while price of average share on NYSE rose 66 cents to $57.60. Highest recent average price level occurred March 15 at $61.48.
  • S&P 500 remains locked between recent short-term high at 1422.38 hit on April 2 and reaction low to 1357.38 hit on April 10.
  • Daily MAAD was positive Tuesday by 14 to 6 after fracturing support low hit on March 6 last Friday.
  • Daily CPFL was positive Tuesday by 1.64 to 1, but remains below April 9 short-term high. Both Daily and Weekly CPFL remain substantially below indicator resistance high put in place February 2011.

Market Overview – What We Think:

  • Until April 10 intraday low at 1357.38 is terminated on downside and near-term “Oversold” conditions are eliminated, we cannot rule out possibility further rebounding could develop.
  • Big question remains whether or not index pricing will be able to better recent highs (1422.38--S&P 500 / April 2). Ongoing failure could ultimately mean Intermediate Cycle high has been put in place and more weakness could follow. New highs would simply reassert uptrend in effect since last October.
  • Best guess is that any near-term rebounding will fade this side of April 2 highs and that April 10 lows (1357.38 / S&P 500) will be breached on downside.
  • More short-term selling could seriously challenge lower edge of 10-Week Price Channels (1351.61 / S&P 500) while threatening to turn larger Intermediate Cycle negative for first time since last fall.

Click charts to enlarge

s&p, technical, analysis, cumulative volume

s&p emini, cumulative, volume

 

Index Daily / Weekly / Monthly Stops Weekly Monthly
 

4/23

4/24

4/25

4/26

4/27

4/27

4/30

S&P 500 Index

BUY 1389.17

BUY 1388.46

BUY 1387.93

BUY 1387.85

BUY 1387.63

SELL 1351.61

SELL 1178.00

Dow Jones Industrials

SELL 12852.64

SELL 12853.84

SELL 12878.48

SELL 12881.24

SELL 12898.52

SELL 12828.63

SELL 11223.60

NASDAQ Composite

BUY 3053.99

BUY 3050.89

BUY 3047.67

BUY 3048.45

BUY 3045.37

SELL 2930.56

SELL 2492.41

Value Line Index

BUY 2999.27

BUY 2998.48

BUY 2996.08

BUY 2996.70

BUY 2996.99

SELL 2966.97

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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