Stock market has spring highs in sight with recent gains

Weekly Review: Stock markets power higher

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

Market Snapshot:

 

Last

Week Chg

Week %Chg

S&P 500 Index

1385.97

+23.31

+1.71%

Dow Jones Industrials

13075.66

+253.09

+1.97%

NASDAQ Composite

2958.09

+32.79

+1.12%

Value Line Arithmetic Index

2897.06

+30.67

+1.06%

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

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

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

In last week’s Market Summary we alluded to advice we once received from a trader in which he suggested that when the market becomes range bound, the astute investor should draw a line across the topmost price and then a line across the bottom bids. When there’s a break above or below one of the two lines, action is taken. True to the trading range theme, the stock market made a lot of noise last week complete with a downside feint on the Minor Cycle and then strength into the end of the week that pushed the S&P 500 above its July 19 first resistance at 1374.81. The Dow Jones Industrials behaved similarly, but performance in the NASDAQ Composite and the Value Line index was more tepid.

Simply put, after a week’s hue and cry and smoke and flame, the stock market as measured by the major indexes remains locked between highs (1422.38—S&P 500) put in place made in late March and early April and the early June lows (1266.74—S&P 500). While it’s true last week’s net strength left the S&P a mere 23% from equaling that April high, it’s also true the bellwether index must also travel that 23% plus a but to make a new high. That’s the issue now.

Will it?

Market Overview – What We Know:

  • Major indexes gained last week as trading volume on NYSE rose more than 9% and Average Price per Share gained $1.04 to $59.19.
  • Despite strength, however, major resistance remains at late March/early April price highs (1422.38—S&P 500).
  • Short-term trend has flipped back to positive after downside feint during first part of trading week, while next larger Intermediate Cycle has moved back to positive after also threatening on downside.
  • To suggest reversal of more positive tone on Minor Cycle, S&P would have to sink below lower edge of 10-Day Price Channel (1349.98—S&P 500 through Monday). Larger Intermediate Cycle remains positive until lower edge of 10-Week Price Channel (1304.95—S&P 500).
  • Short-term Momentum was last moving toward moderately “Overbought” levels along with our proprietary Trading Oscillators and Daily MAAD and CPFL Ratios.
  • Weekly MAAD was positive last week by 15 to 5 while Weekly CPFL was decidedly favorable by 8.5 to 1.
  • While Daily and Weekly MAAD remains unimpressed by market price action as measured by their negatively divergent tones, CPFL also faces a problem with major resistance at the April 9 indicator high.

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