Volatility bailed out S&P, Dow, but stats remain questionable

Weekly Review: Can stock indexes continue making gains?

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

Market Snapshot:

 

Last

Week Chg

Week %Chg

S&P 500 Index

1389.50

+7.00

+.50%

Dow Jones Industrials

13096.20

+20.54

+.15%

NASDAQ Composite

2967.90

+9.81

+.33%

Value Line Arithmetic Index

2888.90

-8.16

-.28%

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

Volatility was the name of the game last week. After eroding to a weekly low last Thursday (1354.88—S&P 500), the S&P and the Dow Jones Industrial Average powered higher to record one of the best daily gains of the year while eclipsing all of the earlier weekly losses. Those two broke above near-term resistance at the July 3 intraday highs (1391.74—S&P) and to their best levels since May 3. But while the NASDAQ Composite and the Value Line index also gained on the week, neither broke above near-term resistance to underscore the fact recent market strength has been more “blue chip” than not.

The S&P 500 continues to face resistance at the May 1 high (1415.32) and then the April 2 peak (1422.38). While both levels could be eclipsed on further buying, strength that would re-assert the major uptrend initiated in March 2009, a failure would highlight the deficiencies a number of our indicators have continued to highlight.

Market Overview – What We Know:

  • Market volatility last week was eventually resolved on upside with S&P, Dow 30, and NASDAQ Composite posting small gains. Value Line index was a small loser.
  • Trading volume on NYSE gained fractionally on week while Average Price per Share was up 21 cents to $59.27.
  • Short-term trend was back in positive territory at end of week and would need to sink below 1352.16—S&P 500 (through Monday) to suggest Minor Cycle negative. Uptrend line for advance since June 4 lows (1266.74—S&P 500) was last drawn near 1355.
  • Intermediate Cycle that has been challenged on downside recently to extent Minor Cycle was equivocating was reinvigorated last week. To suggest an intermediate negative prices would need to sink below lower edge of 10-Week Price Channel at 1311.00—S&P 500 (through August 10).
  • Momentum on both Minor and Intermediate Cycles was last toward “Neutral” while Major Cycle Momentum after months over hovering near “Neutral” was last back into moderately “Overbought” territory.
  • Daily MAAD has refused to confirm any of rally in market since peaking back on July 3 and had last only recovered only about 17% of its losses since April highs even though S&P has come back about 80%.
  • Daily CPFL has performed somewhat better over past month, but indicator continues to holding between April resistance high and low made Last December. Indicator is nowhere near overcoming major resistance made in May 2011.
  • Cumulative Volume (CV) in S&P 500 and S&P 500 Emini futures contract remains weaker than prices on long-term.

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