Stock market mixed Monday, but minor cycle still negative

Daily MAAD dipped to another short-term low on Monday

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

Market Snapshot for session ending 6-4-12:

 

Last

Day Change

%Change

S&P 500 Index

1278.18

+.14

+.01%

Dow Jones Industrials

12101.46

-17.11

-.14%

NASDAQ Composite

2760.01

+12.53

+.46%

Value Line Arithmetic Index

2702.11

-6.72

-.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) Neutral / Negative

Market Overview – What We Know:

  • Major indexes closed mixed Monday after early session losses.
  • NYSE trading volume declined nearly 17% as compared to Friday.
  • Average Price per share declined 11 cents to $54.91.
  • Minor Cycle remains negative, but would suggest positive tone if upper edge of 10-Day Price Channel (1325.72--through Tuesday) in S&P 500 is surpassed. Intermediate Cycle remains negative and must rise above upper edge of 10-Week Price Channel (1406.70).
  • Minor and Intermediate Cycles, as measured by our Most Actives Advance Decline Ratios, were last plotted in “Oversold” territory at .71 and .47, respectively.
  • Major Cycle Momentum turned fractionally negative after long-term advance since March 2009 last week for first time since January 2008. Reading is preliminary and requires end of month closing price in S&P 500.
  • Daily MAAD dipped to another short-term low Monday and was last at a level equivalent to an S&P 500 price of 1215.
  • Daily CPFL was negative Monday by 2.44 to 1. On net basis it wouldn’t take much net selling to drive CPFL back below December short to intermediate-term low.
  • Cumulative Volume (CV) in S&P 500 inched slightly higher Monday while holding just above last Friday’s new short-term low. But CV in the S&P 500 Emini futures contract made a fractional new low on Minor Cycle Monday.

Market Overview – What We Think:

  • Following last week’s sharp losses, it wouldn’t be surprising to see some short-covering develop over next few sessions. But severity of recent losses and negative bias of many of our key indicators will not be easily or quickly reversed.
  • It’s true short and intermediate-term trends are “oversold,” but if history is a guide, “Oversold” readings in a downtrend can be more a reflection of market negativity than of a buying opportunity.
  • If some rebounding develops, we suspect it will serve more to eliminate deep negatives than to provide a good buying opportunity.
  • Best we could see within current intermediate negative context would be gains toward 1400 and upper edge of 10-Week Price Channel in S&P 500. Such strength, however, would cause Minor Cycle to turn positive since prices in bellwether S&P 500 since index would rise by default above the upper edge of a defined 10-Day Price Channel (1325.72--through Tuesday).
  • Best guess on how far current intermediate negative could carry would be 1283-1213 if “normal” 40% to 60% pullback develops on Intermediate Cycle as calculated from April S&P 500 high at 1422.38.
  • Market weakness could ultimately bring market pricing into line with negative indicator biases.

Click charts to enlarge

stock, index, technical, analysis, cumulative volume

stock index, technical analysis, cumulative volume

 

Index Daily / Weekly / Monthly Stops Weekly Monthly
 

6/4

6/5

6/6

6/7

6/8

6/8

6/30

S&P 500 Index

BUY
1324.66

BUY
1325.72

BUY
1326.42

BUY
1325.27

BUY
1322.73

BUY
1406.70

SELL
1185.81

Dow Jones Industrials

BUY
12559.06

BUY
12559.91

BUY
12558.62

BUY
12544.36

BUY
12516.48

BUY
13223.74

SELL
11413.64

NASDAQ Composite

BUY
2861.38

BUY
2862.76

BUY
2858.45

BUY
2854.77

BUY
2846.52

BUY
3079.96

SELL
2501.62

Value Line Index

BUY
2826.24

BUY
2829.86

BUY
2833.13

BUY
2828.70

BUY
2822.87

BUY
3059.19

SELL
2551.83

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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