Stock market faces resistance, S&P 500 approaching 1380.39

May give bullish activity pause

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

Market Snapshot for session ending 7-26-12

 

Last

Day Change

%Change

S&P 500 Index

1360.02

+22.13

+1.65%

Dow Jones Industrials

12887.93

+211.88

+1.67%

NASDAQ Composite

2893.25

+39.01

+1.37%

Value Line Arithmetic Index

2830.37

+39.39

+1.41%

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:

  • Market gains Thursday pushed major indexes higher and put short-term trend back in limbo.
  • Trading volume on NYSE rose 14% and Average Price per Share rose 65 cents to $58.86.
  • After threatening on downside over past week, short-term trend is currently knocking on upside once again. Buying in S&P 500 above upper edge of 10-Day Price Channel (1366.52 through Friday) would suggest possible reversal of Minor Cycle back to positive. Buying above that level would also give more positive tone to larger Intermediate Cycle.
  • Short-term Momentum was last near “Neutral” along with our Trading Oscillators.
  • Uptrend line near 1340 in S&P 500 was fractionally breached on downside Tuesday, but strength since then has put S&P pricing back above that level.
  • Daily MAAD was positive Thursday with 13 issues higher and 7 lower. Daily MAAD continues to substantially underperform broad market since making near-term peak on July 3. Daily MAAD Ratio has begun moving higher and was last plotted at 1.07.
  • Daily CPFL was positive Thursday by 2.32 to 1. CPFL data has been taking on more positive tone lately with 8 of 9 last sessions net positive. Indicator remains locked between resistance created in April and support made last December,

Market Overview – What We Think:

  • Another downside flirtation and then an upside move has come into stock market. S&P was last back toward upper edge of 10-Day Price Channel (1366.52 through Thursday) and could then threaten July 19 intraday high and first resistance (1380.39) if there is upside follow-through. Then issue would become April 2 major resistance high at 1422.38.
  • But with some of our short-term oscillators like MAAD Ratio starting to accelerate on upside again with strength over past few days, it remains to be seen if strength will prove to be yet another aborted rally short of late March/early April highs.
  • Failure or a gain would affect larger Intermediate Cycle that currently is holding near “Neutral.”
  • Upside failure at this time with all of major indexes having been unable 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.
  • More strength, however, with movement above July 19 short-term high and then April 2 peak would simply re-assert major uptrend in effect since March 2009 lows.

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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