Short-term stock market trend remains mired in indecision

Trading Volume rose by 8% on NYSE Monday

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

Market Snapshot for session ending 4-30-12:

 

Last

Day Change

%Change

S&P 500 Index

1397.91

-5.45

-.39%

Dow Jones Industrials

13213.63

-14.67

-.11%

NASDAQ Composite

3046.36

-22.84

-.74%

Value Line Arithmetic Index

3022.05

-22.18

-.73%

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

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

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

Market Overview – What We Know:

  • Major indexes suffered small losses Monday, but Minor Cycle nonetheless remains positive.
  • It remains to be seen whether or not Minor Cycle advance is mere retracement after creation of Intermediate Cycle high (1422.38—S&P), or a resumption of larger trend in effect since last October.
  • Until S&P 500 is able to better April 2 high at 1422.38, suggestion remains that broad market may have put in place an Intermediate Cycle high. Weakness below S&P 500 at 1357.38 hit on April 10 would have bearish implications.
  • MAAD Daily and Weekly Ratios were last plotted near “Neutral” to suggest overall market neutrality on Minor and Intermediate Cycles.
  • Selling below lower edge of 10-Week Price Channel at 1361.46—S&P 500 (through 5/4) would be first such weakness below weekly price channel since last fall.
  • Trading Volume rose by 8% on NYSE Monday while Average Price per Share rose 18 cents to $58.56. Highest recent average price level occurred March 15 at $61.48.
  • Daily MAAD was negative Monday by 7 to 13 and MAAD Daily Ratio was last plotted near neutral at .97.
  • Daily CPFL was positive Monday by 1.40 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 2 intraday low at 1422.38—S&P 500 is surpassed on upside or until April 10 intraday low at 1357.38—S&P 500 is fractured on downside, larger Intermediate Cycle underway since last October lows (1074.77—S&P 500) will remain intact.
  • Relative market neutrality reflected in MAAD Daily and Weekly Ratios suggests market indecision may soon be resolved. Bullish view would suggest recent weakness has been merely setup for further gains while bearish stance would indicate near-term strength could fail and prove to be return action rally into developing Intermediate Cycle top.
  • If new highs are not created, ongoing failure could ultimately mean Intermediate Cycle high has been put in place and weakness should follow. New highs would reassert uptrend in effect since last October.
  • Best guess is that near-term rebounding will fail this side of April 2 highs and that April 10 lows (1357.38 / S&P 500) will be breached on downside relatively soon.
  • More short-term selling would seriously challenge lower edge of 10-Week Price Channels (1361.46 / S&P 500) while threatening to turn larger Intermediate Cycle negative for first time since last fall.

Click charts to enlarge

s&p 500, stock index, technical analysis, cumulative volume

stock index, emini, s&p, cumulative volume


Index Daily / Weekly / Monthly Stops Weekly Monthly
 

4/30

5/1

5/2

5/3

5/4

5/4

5/31

S&P 500 Index

SELL1369.66

SELL1369.46

SELL1370.05

SELL1373.16

SELL1377.75

SELL1361.46

SELL1175.98

Dow Jones Industrials

SELL12895.09

SELL12907.44

SELL12928.07

SELL12958.63

SELL13005.43

SELL12880.89

SELL11273.01

NASDAQ Composite

SELL2992.06

SELL2983.66

SELL2986.86

SELL2993.16

SELL3002.14

SELL2964.33

SELL2485.38

Value Line Index

SELL2948.78

SELL2947.60

SELL2949.16

SELL2956.94

SELL2966.86

SELL2984.60

SELL2543.91

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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