Market stalls -- S&P 500 short of major resistance at 1422.38

NYSE trading volume diminished by nearly 13%

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

Market Snapshot for session ending 08-08-12

 

Last

Day Change

%Change

S&P 500 Index

1402.22

+.87

+.06%

Dow Jones Industrials

13175.64

+7.04

+.05%

NASDAQ Composite

3011.25

-4.61

-.15%

Value Line Arithmetic Index

2944.49

+5.57

+.19%

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

Market Overview – What We Know:

  • Major indexes closed mixed Wednesday and within range of even.
  • NYSE trading volume diminished by nearly 13% while Average Price per Share was down 3 cents to $59.33.
  • Short-term trend remains positive and would need to sink below lower edge of 10-Day Price Channel (1360.21 through Thursday) to suggest reversal of Minor Cycle to negative.
  • Intermediate Cycle was last positive and must sink below lower edge of 10-Week Price Channel (1311.00--S&P 500 through August 10) to create Intermediate Cycle negative.
  • Momentum on Minor, Intermediate, and Major Cycles remains toward “Neutral.”
  • Our Minor and Intermediate-term Trading Oscillators remain “Overbought.”
  • Daily MAAD has refused to confirm any of rally in market since peaking back on July 3. Indicator was nonetheless positive by 14 to 4 Wednesday with MAAD Daily Ratio moderately “Overbought” at 1.43.
  • Daily CPFL was negative Wednesday by 1.16 to 1 with Daily CPFL Ratio toward “Overbought” territory at 1.85.

Market Overview – What We Think:

  • Decision point for stock market as measured by bellwether S&P 500 remains at April 2 major resistance high (1422.38). Strength above that level would suggest resumption of uptrend begun in March 2009. Failure to better that level could have long-term negative consequences.
  • With NASDAQ Composite and Value Line index still substantially lagging S&P and Dow 30, strength in “bluer” issues should be viewed with some skepticism. In addition, most of our key indicators, especially MAAD, continue to lag pricing.
  • Lingering negative divergence by Daily MAAD is ongoing suggestion Smart Money has been doing more selling into strength over past several weeks than buying.
  • If recent rally is legitimate and for real, then where’s indicator corroboration? We simply cannot remember an instance where market powered higher indefinitely without confirmation from key indicators.

cumulative, volume, s&p

cumulative, volume, emini

Index Daily / Weekly / Monthly Stops Weekly Monthly
 

8/6

8/7

8/8

8/9

8/10

8/10

8/31

S&P 500 Index

SELL 1352.16

SELL 1358.18

SELL 1360.53

SELL 1360.21

SELL 1362.16

SELL 1311.00

SELL 1229.29

Dow Jones Industrials

SELL 12769.22

SELL 12817.03

SELL 12848.22

SELL 12844.52

SELL 12862.09

SELL 12434.30

SELL 11829.11

NASDAQ Composite

SELL 2890.35

SELL 2899.00

SELL 2902.69

SELL 2901.21

SELL 2910.85

SELL 2823.64

SELL 2616.71

Value Line Index

SELL 2826.91

SELL 2833.92

SELL 2834.52

SELL 2829.53

SELL 2828.84

SELL 2776.03

SELL 2649.82

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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