E-mini S&P trading strong overnight, sets tone for Friday

Market hesitant on downside

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

Market Snapshot for session ending 6-28-12

 

Last

Day Change

%Change

S&P 500 Index

1329.04

-2.81

-.21%

Dow Jones Industrials

12602.26

-24.74

-.20%

NASDAQ Composite

2849.49

-25.83

-.90%

Value Line Arithmetic Index

2813.39

+.09

+.00%

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

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:

  • S&P 500, Dow 30, and NASDAQ Composite indexes posted small losses Thursday, while Value Line index was up a fraction.
  • In overnight trading Thursday night, and probably in response to a resolution of Obamacare uncertainties by U.S. Supreme court, sharp gains registered by S&P 500 Emini futures could result in carry over strength into broad market Friday.
  • Trading Volume on NYSE rose 32% Thursday.
  • If buying in S&P 500 Friday moves above upper edge of 10-Day Price Channel at 1348.11, short-term trend would take on more positive tone.
  • To suggest end to Intermediate Cycle negative, S&P 500 must rally above upper edge of 10-Week Price Channel (1379.34—S&P 500 through June 29).
  • Minor Cycle, as measured by MAAD Daily Ratio, was moving toward “Neutral” Thursday with a reading of 1.15, But Daily MAAD was net negative with 15 issues lower and 5 higher.
  • Daily CPFL was positive Thursday by 1.23 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:

  • Inability of S&P 500 to decisively break below lower edge of 10-Day Price Channel over past few sessions, with coincident “Neutral” readings in short-term Momentum, our Trading Oscillators, and the MAAD Daily Ratio could mean the broad market has lost downside steam and that Minor Cycle could take on a more positive tone over next several sessions.
  • But there is still an issue with larger Intermediate Cycle that remains negative until 1379.74 (through June 29) at upper edge of 10-Week Price Channel.
  • It’s possible S&P 500 could improve modestly, create near-term “Overbought” conditions once again while shaking out some more shorts as it fails to make new highs above April 2 peak at 1422.38. Stage could then be set for larger Intermediate Cycle to re-assert itself on downside.
  • Longer-term bullish configuration would suggest current “Oversold” conditions on Intermediate Cycle should be taken more seriously. Such “seriousness” would be a suggestion the April 2 high at 1422.38 could be challenged. We doubt it, but how next short-term cycle plays out will determine how right we are.

Click charts to enlarge

cumulative volume, s&p

cumulative, volume, emini

 

Index Daily / Weekly / Monthly Stops Weekly Monthly
 

6/25

6/26

6/27

6/28

6/29

6/29

6/30

S&P 500 Index

SELL 1316.12

SELL 1322.77

SELL 1328.42

SELL 1328.96

SELL 1329.56

BUY 1379.34

SELL 1185.81

Dow Jones Industrials

SELL 12502.01

SELL 12562.44

SELL 12610.72

SELL 12614.37

SELL 12617.79

BUY 13019.48

SELL 11413.64

NASDAQ Composite

SELL 2820.87

SELL 2838.63

SELL 2853.79

SELL 2587.26

SELL 2861.43

BUY 3002.57

SELL 2501.62

Value Line Index

SELL 2764.31

SELL 2776.54

SELL 2791.39

SELL 2793.68

SELL 2796.16

BUY 2973.79

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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