Market mixed Wednesday, but short-term trend shaky

Volume indicators have broken trendlines

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

Market Snapshot for session ending 7-25-12

 

Last

Day Change

%Change

S&P 500 Index

1337.89

-.42

-.03%

Dow Jones Industrials

12676.05

+58.72

+.47%

NASDAQ Composite

2854.24

-8.75

-.31%

Value Line Arithmetic Index

2790.98

+2.77

+.10%

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

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:

  • Major indexes closed mixed Wednesday with S&P 500 and NASDAQ Composite off fractionally and Dow Jones Industrials and Value Line index up a bit.
  • Trading volume on NYSE shrank about 3% while Average Price per Share rose 25 cents to $58.26.
  • Short-term trend in S&P 500 continues to threaten short-term negativity and Intermediate Cycle is under negative threat. Selling below 1306.76 in S&P 500 would suggest negative resolution of Intermediate Cycle.
  • Short-term Momentum and one of our two, key short-term Trading Oscillators in bellwether S&P 500 were last negative with second oscillator nearly negative.
  • Uptrend line near 1340 in S&P 500 was fractionally breached on downside Tuesday.
  • Daily MAAD was marginally positive Wednesday with 13 issues higher and 7 lower. On more ominous note, MAAD has moved below July 12 support point when S&P hit intraday low at 1325.41 and even though S&P has yet to sink break below that level. Indicator continues to substantially underperform broad market since making near-term peak on July 3.
  • Daily CPFL was positive Wednesday by 1.35 to 1 and remains locked between resistance created in April and support made last December.
  • CV in S&P 500 and S&P Emini have broken below uptrend lines in effect since June.

Market Overview – What We Think:

  • Follow-on selling Tuesday in wake of Monday’s losses, and despite Wednesday’s slight improvement, movement toward short-term negativity by several of our indicators, and downside break below uptrend line (1340—S&P 500) in effect since June 4 lows, suggests near-term trend may be on verge of negative reversal.
  • If short-term negative progresses, action would put June 4 lows (1266.74—S&P 500) in crosshairs since bottom edge of 10-Week Price Channels (1306.76—S&P 500) would already have been penetrated on downside to suggest Intermediate Cycle negative.
  • Upside failure at this time with all of major indexes having failed to better late March/early April highs could create longer-term problems for market since break below June lows could then threaten primary uptrend line (1240—S&P 500) stretching back to March 2009 major bottom.
  • Additional fact Daily MAAD has “liked” none of advance since July 3 and remains much weaker than S&P is indication market underpinnings remain poor, as measured by Smart Money.
  • Simply put, market may be closing in on number of critical support points.

cumulative, volume, s&p

cumulative, volume, emini

Index Daily / Weekly / Monthly Stops Weekly Monthly
 

7/23

7/24

7/25

7/26

7/27

7/27

7/31

S&P 500 Index

SELL  1340.90

SELL  1340.81

SELL  1343.45

SELL  1348.40

SELL  1351.56

SELL  1306.76

SELL  1205.40

Dow Jones Industrials

SELL  12630.30

SELL  12624.32

SELL  12640.99

SELL  12683.92

SELL  12711.70

SELL  12407.09

SELL  11616.99

NASDAQ Composite

SELL  2887.90

SELL  2882.21

SELL  2883.18

SELL  2893.98

SELL  2899.95

SELL  2812.04

SELL  2553.42

Value Line Index

SELL  2856.02

SELL  2850.81

SELL  2851.19

SELL  2857.50

SELL  2858.89

SELL  2768.16

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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