Market up Tuesday, but ensuing futures trading weak

Short-term trend remains positive

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

Market Snapshot for session ending 7-3-12

 

Last

Day Change

%Change

S&P 500 Index

1374.02

+8.51

+.62%

Dow Jones Industrials

12943.82

+72.43

+.56%

NASDAQ Composite

2976.08

+24.85

+.84%

Value Line Arithmetic Index

2949.76

+35.17

+1.21%

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

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

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

Market Overview – What We Know:

  • Major indexes posted modest gains Tuesday in face of July 4 holiday, but in overnight trading Tuesday and Wednesday marginal selling developed.
  • In truncated trading session Tuesday, NYSE volume shrank 36% compared to Monday’s normal session. Average Price per Share declined 35 cents Tuesday to $58.13.
  • Short-term trend remains positive. Next larger Intermediate Cycle continues to threaten on upside, but needs positive confirmation from Momentum, our Trading Oscillators, and Weekly MAAD Ratio that remain pegged toward “oversold” levels..
  • Daily MAAD Ratio was plotted Monday at 1.19 with 18 issues up and 2 down.
  • At June 4 low, Daily MAAD Ratio was deeply “Oversold, (.71), which means short-term strength continues, MAAD Daily Ratio could reach “Overbought” territory relatively soon.
  • Daily CPFL was negative Tuesday by .98 to 1.
  • Cumulative Volume (CV) in S&P 500 and S&P 500 Emini futures contract has moved to new short-term highs with S&P pricing, but each remains weaker than S&P on relative basis.

Market Overview – What We Think:

  • With prices inching higher in S&P 500, decision could soon be made on viability of lingering Intermediate Cycle negative initiated after April 2 intermediate high (1422.38).
  • With S&P now marginally above upper edge of 10-Week Price Channel (1368.93), there is suggestion intermediate downtrend may be over. But with upside confirmation from intermediate Momentum, our Trading Oscillators, and Weekly MAAD Ratio, we cannot preclude possibility short-term gains since June 4 low could prove to be no more than reflex rally within context of still negative Intermediate Cycle.
  • Depending on how quickly short-term “Overbought” conditions develop, intermediate trend will remain viable.
  • If intermediate trend reverses to positive, then significant issue becomes relationship of new pricing to late March/early April highs. Buying above those levels would re-assert long-term uptrend initiated March 2009. Failure would similarly have longer-term implications.

Click charts to enlarge

cumulative, volume, s&p

cumulative, volume, emini

Index

Daily / Weekly / Monthly Stops

Weekly

Monthly

 

7/2

7/3

7/4

7/5

7/6

7/6

7/31

S&P 500 Index

SELL
1376.81

SELL
1324.21

SELL
1323.44

SELL
1321.14

SELL
1321.91

BUY
1368.93

SELL
1205.40

Dow Jones Industrials

SELL
12596.80

SELL
12573.63

SELL
12564.41

SELL
12538.74

SELL
12542.00

BUY
12929.41

SELL
11616.99

NASDAQ Composite

SELL
2858.41

SELL
2855.48

SELL
2857.13

SELL
2850.25

SELL
2857.26

BUY
2973.98

SELL
2553.42

Value Line Index

SELL
2792.40

SELL
2787.27

SELL
2786.35

SELL
2784.00

SELL
2788.16

BUY
2945.71

SELL
2598.64

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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