S&P 500 leads as markets turn higher Tuesday

Other indexes lag with respect to cycles

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

Market Snapshot for session ending 7-17-12

 

Last

Day Change

%Change

S&P 500 Index

1363.67

+10.03

+.74%

Dow Jones Industrials

12805.54

+78.33

+.62%

NASDAQ Composite

2910.04

+13.10

+.45%

Value Line Arithmetic Index

2876.19

+10.41

+.36%

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

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

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

Market Overview – What We Know:

  • Intraday volatility characterized market action Tuesday when the S&P 500 ranged more than 20 points between 10:45 am (EDT) and 3:00 pm.
  • Modest gains were recorded in all of major indexes, but S&P 500 has fractured upper edge of 10-Day Price Channel (1359.62 through Wednesday) to suggest more positive near-term tone.
  • Strength continues to threaten to turn Minor Cycle and Intermediate Cycles positive in S&P 500, but to lesser extent in Dow 30, NASDAQ Composite and Value Line index which trail S&P.
  • Trading volume on NYSE rose 12% and Average Price per Share advanced 89 cents to $59.50.
  • Short-term Trading Oscillators remain somewhat vulnerable.
  • MAAD Daily Ratio was “oversold” at .77 Tuesday, as Daily MAAD was positive by 15 to 5. Indicator was last plotted at level equivalent to S&P 500 price of about 1320 and continues to suggest Smart Money has not been as enthused as indexes would suggest.
  • Daily CPFL was positive Tuesday by 1.62 to 1.
  • Cumulative Volume (CV) in S&P 500 and S&P 500 Emini futures contract has been moving in synch with index prices lately, but both remain generally weaker than S&P 500.

Market Overview – What We Think:

  • Tuesday’s turnaround in market from net negative to positive Tuesday underscored intraday volatility, but also current market indecision. Ongoing flirtation with upside buy points on both Minor and Intermediate Cycles in S&P 500 has nonetheless given market somewhat more positive tone.
  • It remains to be seen if that tone can be sustained since lagging action of Dow 30, NASDAQ Composite, and Value Line index is evident while S&P 500 continues to outperform the other indexes. At same time, most of our short-term stats remain near neutral while leaving Minor Cycle question mark hanging in air.
  • Price flirtations within range of upside buy points aside, main determining factor on Major Cycle will continue to be March/April resistance highs (1422.38—S&P 500) and points that must be surpassed to re-assert long-term advance begun in March 2009.
  • If follow through strength does not develop, we would look for weakness back below uptrend lines (toward 1340 -- S&P 500) stretching back to June lows. Such action would confirm fact that 58% retracement of losses from early April to early June has ended.
  • Relatively poor showing of Daily and Weekly MAAD continues to linger in back of our technical mind as indication underpinnings of this market remain weak. But decision on that score must come with price breakdown.

Click charts to enlarge

cumulative, volume, s&p

cumulative, volume, emini

Index Daily / Weekly / Monthly Stops Weekly  Monthly 
   7/16 7/17  7/18  7/19  7/20  7/20  7/31 

S&P 500 Index

BUY
1359.79

BUY
1361.45

BUY
1359.62

BUY
1356.73

BUY
1356.70

SELL
1306.52

SELL
1205.40

Dow Jones Industrials

BUY
12838.02

BUY
12846.12

BUY
12787.84

BUY
12820.76

BUY
12783.24

SELL
12402.59

SELL
11616.99

NASDAQ Composite

BUY
2942.27

BUY
2948.08

BUY
2943.55

BUY
2932.91

BUY
2929.11

SELL
2812.99

SELL
2553.42

Value Line Index

BUY
2908.36

BUY
2914.77

BUY
2911.62

BUY
2903.79

BUY
2900.54

SELL
2773.33

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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