Mixed stock market enters fifth session in trading range

Short-term cycle remains negative and oversold

Stock ticker, distorted Stock ticker, distorted

Market Snapshot for session ending 5-10-12:

 

Last

Day Change

%Change

S&P 500 Index

1357.99

+3.41

+.25%

Dow Jones Industrials

12855.04

+19.98

+.16%

NASDAQ Composite

2933.64

-1.07

-.04%

Value Line Arithmetic Index

2916.90

+7.37

+.25%

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

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

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

Market Overview – What We Know:

  • Major indexes were mixed Thursday with slightly upward bias in S&P 500, Dow 30, and Value Line index. NASDAQ Composite was bit lower.
  • Index prices, as measured by S&P 500, have been stuck in intraday trading range since breakdown in pricing last Sunday night. Selling below Wednesday’s low (1343.13—S&P 500) would re-assert Intermediate Cycle negativity.
  • Short-term trend remains negative and “Oversold.”
  • All of major indexes were last plotted below lower edges of 10-Week Price Channels to confirm end of advance began last October 4 and trend reversal to intermediate-term negative.
  • NYSE exchange trading volume was lower Thursday by nearly 17%.
  • Daily MAAD improved slightly Thursday with 12 issues higher and 8 negative. On net basis MAAD remains in short-term downtrend and was last plotted at level equivalent to S&P 500 price of about 1300.
  • Daily MAAD Ratio remains negative and “Oversold” (last at .59).
  • Average Price per Share declined 9 cents to $57.23 Thursday. Highest recent average price level occurred March 15 at $61.48.
  • Daily CPFL was negative Thursday by 1.09 to 1. Indicator remains below April 9 short-term high and well below major high put in place February 2011.

Market Overview – What We Think:

  • Recent weakness in major indexes and broad market with confirming negativity by such indicators as Daily MAAD are an indication uptrend since last October has ended.
  • Question now is how far weakness will carry and what will be implications for larger Major Cycle that has been hovering near “Neutral” for months?
  • Weakness highlights trend toward new Intermediate Cycle negative.
  • How quickly short-term “Oversold” conditions begin to take hold within context of intermediate-term weakness will determine where first rebound will occur.
  • Until Intermediate Cycle also becomes “Oversold” market could remain vulnerable to renewed selling pressures.
  • Given ongoing “reluctance” of majority of our key indicators to confirm recent strength to new highs, presumption is strong selling could be stronger than many believe.
  • Three indicators, MAAD, CPFL, and CV that measure Smart Money bias, sentiment, and the power of buying continue to indicate market underpinnings remain weak and that price action could adjust accordingly.

Click charts to enlarge

stock, index, technical, analysis, cumulative volume

stock index, technical analysis, cumulative volume, emini

 

Index Daily / Weekly / Monthly Stops Weekly Monthly
 

5/7

5/8

5/9

5/10

5/11

5/11

5/31

S&P 500 Index

BUY1394.36

BUY1398.63

BUY1400.69

BUY1402.05

BUY1401.07

SELL1369.70

SELL1175.98

Dow Jones Industrials

SELL13042.98

SELL13074.37

SELL13104.35

SELL13128.33

SELL13119.36

SELL12918.39

SELL11273.01

NASDAQ Composite

BUY3039.96

BUY3048.72

BUY3052.54

BUY3056.05

BUY3048.61

BUY3057.13

SELL2485.38

Value Line Index

BUY3014.53

BUY3024.81

BUY3028.13

BUY3030.40

BUY3024.39

BUY3077.34

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.

Next page: Indicator review

Page 1 of 2 >>
Comments
comments powered by Disqus