Market mixed Monday on flat prices, low volume

Short-term trend remains positive

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

Market Snapshot for session ending 6-18-12:

 

Last

Day Change

%Change

S&P 500 Index

1344.10

+1.94

+.14%

Dow Jones Industrials

12741.82

-25.38

-.20%

NASDAQ Composite

2895.33

+22.53

+.78%

Value Line Arithmetic Index

2822.26

+8.67

+.31%

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

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 with S&P up a bit, Dow Jones Industrials down a bit, and NASDAQ Composite and Value Line index slightly ahead.
  • Trading volume shrank nearly 54% as compared to Friday’s activity, while Average Price per share was unchanged at $56.73.
  • Short-term trend remains positive while next larger Intermediate Cycle is still negative.
  • To suggest new short-term negative, S&P 500 would have to drop below lower edge of 10-Day Price Channel at 1297.79 (through Tuesday).
  • To suggest a positive reversal of Intermediate Cycle, S&P 500 must rally above upper edge of 10-Week Price Channel at 1392.33 (through June 22).
  • Minor Cycle, as measured by MAAD Daily Ratio and our short-term Trading Oscillators, has moved into “Overbought” territory. Daily MAAD Ratio was last at 1.98. -- Intermediate Cycle stats continue to hold toward “Oversold.” Weekly MAAD Ratio was last plotted at .66.
  • Daily MAAD was even Monday with 10 issues up and 10 down.
  • Daily CPFL was negative Monday by 1.57 to 1.
  • Cumulative Volume (CV) in both S&P 500 and S&P Emini futures contract was little changed Monday from Friday’s levels.

Market Overview – What We Think:

  • While short-term trend following June 4 lows (1266.74—S&P 500) has resulted in a recovery of nearly 50% of losses sustained following April 2 S&P 500 high (1422.38), rapid change in market stats from “Oversold” to “Overbought” on Minor Cycle suggests this rally could have limited staying power.
  • We could see short-term peak anywhere this side of upper edge of 10-Week Price Channel (1392.33 through June 22) and a high that could be followed by a resumption of selling on Intermediate Cycle.
  • As a consequence, any near-term price improvement should be viewed with skepticism. We do not think March/April highs (1422.38—S&P 500) will be exceeded via rebounding. Nothing but strength back above April 2 high in S&P would suggest resumption of long-term uptrend.
  • In event larger Intermediate Cycle resumes downward course, there could be weakness in S&P 500 toward 1283-1213 if “normal” 40% to 60% pullback develops as calculated from April S&P 500 high at 1422.38.

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stock, index, technical, cumulative volume, emini

 

Index

Daily / Weekly / Monthly Stops

Weekly

Monthly

 

6/18

6/19

6/20

6/21

6/22

6/22

6/30

S&P 500 Index

BUY
1295.87

BUY
1297.79

BUY
1300.64

BUY
1304.16

BUY
1310.13

BUY
1392.33

SELL
1185.81

Dow Jones Industrials

BUY
12272.97

BUY
12298.39

BUY
12332.19

BUY
12372.94

BUY
12438.35

BUY
13129.00

SELL
11413.64

NASDAQ Composite

BUY
2793.10

BUY
2794.57

BUY
2798.33

BUY
2801.81

BUY
2810.72

BUY
3037.49

SELL
2501.62

Value Line Index

BUY
2743.65

BUY
2742.69

BUY
2743.69

BUY
2747.45

BUY
2755.73

BUY
3012.07

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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