S&P 500 hits price target at 1360 Tuesday and fades

Trading volume on NYSE rose by nearly 9%

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

Market Snapshot for session ending 6-19-12:

 

Last

Day Change

%Change

S&P 500 Index

1357.98

+13.20

+.98%

Dow Jones Industrials

12837.33

+95.50

+.75%

NASDAQ Composite

2929.76

+34.42

+1.19%

Value Line Arithmetic Index

2869.30

+47.04

+1.67%

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

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

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

Market Overview – What We Know:

  • Modest gains were posted by major indexes Tuesday.
  • Trading volume on NYSE rose by nearly 9% and Average Price per share added $1.21 to $57.94. Most recent highest AP/S occurred back on March 15 at $61.48.
  • 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 1300.64 (through Wednesday).
  • 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 at 2.08 Tuesday.
  • Intermediate Cycle stats continue to hold toward “Oversold.” Weekly MAAD Ratio was last plotted at .66 for week ending June 15.
  • Daily MAAD was positive Tuesday with17 issues higher and 3 lower. Daily MAAD was last right at downtrend line stretching back to early April.
  • Daily CPFL was positive Tuesday by 1.82 to 1.
  • Cumulative Volume (CV) in S&P 500 and S&P Emini futures contract remains in synch with underlying S&P 500 pricing, but is somewhat weaker on cumulative basis.

Market Overview – What We Think:

  • After S&P 500 reached our upside measured move target at 1360 Tuesday, selling commenced and forced bellwether nearly 5 ½ points lower by the day’s close to just below our upside target at that 1360 level.
  • While it remains to be seen if that 1360 in S&P will be challenged again, we wonder now in the face of Intermediate Cycle resistance at the upper edge of the S&P’s 10-Week Price Channel (1392.33) and “overbought” short-term stats, if this rally could be close to a near-term peak.
  • If further short-term gains develop, so long as S&P remains below upper edge of 10-Week Price Channel, that larger cycle will remain negative.
  • Within that intermediate context, we will continue to view near-term price improvement 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.

Click charts to enlarge

stock, index, technical, cumulative volume

emini, cumulative volume
 

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.

Next page: Indicator review

Page 1 of 2 >>
Comments
comments powered by Disqus