Market gains Tuesday as Dow 30 does solo to new high

S&P 500 must better April 2 high at 1422.38

Bull shadow, stock index chart Bull shadow, stock index chart

Market Snapshot for session ending 5-1-12:

 

Last

Day Change

%Change

S&P 500 Index

1405.82

+7.91

+.57%

Dow Jones Industrials

13279.32

+65.69

+.50%

NASDAQ Composite

3050.44

+4.07

+.13%

Value Line Arithmetic Index

3027.93

+5.88

+.19%

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 rallied Tuesday, as Dow Jones Industrial Average moved past April 2 short-term high (13297.11) and to best level since last October. Dow’s strength to new high was singular performance, however, since none of other major index confirmed that movement.
  • As a consequence, 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.
  • With market still toward “Neutral” as measured by Daily MAAD Ratio (.88) market potential rests more with bulls than bears. Daily MAAD was positive Tuesday by 14 to 6 issues.
  • 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 declined by over 9% Tuesday on NYSE as Average Price per Share faded 23 cents to $58.33. Highest recent average price level occurred March 15 at $61.48.
  • Daily CPFL was neutral Tuesday and 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, and despite Tuesday’s strength to best level by Dow 30 since last October, larger Intermediate Cycle underway since October lows (1074.77—S&P 500) will nonetheless remain intact. 
  • Relative market neutrality is still reflected in MAAD Daily and Weekly Ratios. Bullish resolution would suggest recent weakness was merely setup for further gains.
  • If new highs do not follow in S&P 500, the market bellwether, 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 in S&P 500 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.

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stock, index, cumulative volume, analysis

stock index, emini, chart, 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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