S&P 500 acting as if intermediate high has been seen

Modest losses posted across the board Thursday.

Bull, Bear, Market forces Bull, Bear, Market forces

Market Snapshot for session ending 5-3-12:

 

Last

Day Change

%Change

S&P 500 Index

1391.57

-10.74

-.77%

Dow Jones Industrials

13206.59

-61.98

-.47%

NASDAQ Composite

3024.30

-35.55

-1.16%

Value Line Arithmetic Index

2986.00

-43.20

-1.43%

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

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

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

Market Overview – What We Know:

  • Modest losses were posted across the board Thursday.
  • Short-term trend is once again threatened on downside and, if broken, could place larger Intermediate Cycle in jeopardy.
  • Until confirmed downside break occurs it remains to be seen whether or not recent near-term price action will prove to be mere retracement within context of larger trend in effect since October.
  • Break below lower edge of 10-Day Price Channel in S&P 500 (1377.75) would almost certainly signal new Minor Cycle negative while selling below lower edge of 10-Week Price Channel at 1361.46—S&P 500 (through 5/4) would be first such channel weakness since last fall.
  • Daily MAAD was negative Thursday by 2 to 18 and remains noticeably below March 20 peak, despite fact index pricing has performed better since then.
  • Trading Volume rose more than 8% on NYSE Thursday and Average Price per Share declined 61 cents to $57.09. Highest recent average price level occurred March 15 at $61.48.
  • Daily CPFL was negative Thursday by 1.14 to 1. Indicator remains below April 9 short-term high. Both Daily and Weekly CPFL remain well below indicator resistance high put in place February 2011.

Market Overview – What We Think:

  • Until April 2 intraday high 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, Intermediate Cycle underway since October low (1074.77—S&P 500) will remain intact.
  • Break below lower edge of defined 10-Week Price Channel (1361.46—S&P 500), however, would signal likely reversal of trend in effect since last October.
  • While relative market neutrality is still reflected via MAAD Daily Ratio, possibility lingers, lacking downside break below 10-Week Price Channel and minor support (1357.38—S&P 500) that current weakness could be setup for further gains.
  • If new highs do not follow in S&P 500, ongoing upside failure could mean Intermediate Cycle top has been put in place.
  • 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 soon be breached on downside, as new Intermediate Cycle negative is asserted.

Click charts to enlarge

stock index, cumulative volume, chart

stock index, cumulative volume, emini, chart


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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