Stock market locked in eight-day trading range

Short-term trend remains positive

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

Market Snapshot for session ending 08-15-12

 

Last

Day Change

%Change

S&P 500 Index

1405.53

+1.59

+.11%

Dow Jones Industrials

13164.78

-7.35

-.06%

NASDAQ Composite

3030.93

+13.95

+.46%

Value Line Arithmetic Index

2959.47

+19.40

+.66%

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:

  • S&P 500, NASDAQ Composite, and Value Line index were slightly higher Wednesday. Dow Jones Industrial Average was slightly negative.
  • Broad market has been moving laterally for nearly a week.
  • NYSE trading volume sank 12% and remains sub normal below its 10-Day moving average.
  • Short-term trend remains positive until lower edge of 10-Day Price Channel (1384.83 through Thursday) while Intermediate Cycle would require weakness below lower edge of 10-Week Price Channel (1313.24 through August 17) to turn negative.
  • Short-term Momentum and our proprietary Trading Oscillators remain positive and “Overbought.”
  • Daily MAAD was positive Wednesday by 13 to 7 while holding below resistance high made July 3. Daily MAAD Ratio was last at 1.26.
  • CPFL was positive Wednesday by 2.45 to 1.

Market Overview – What We Think:

  • It remains to be seen if S&P 500 will be able to overcome resistance high (1422.38) put in place April 2 to re-assert major advance begun in March 2009.
  • Given upside failure of Daily MAAD since July 3, and despite market strength since then, we continue to wonder if price gains since June 4 lows could prove to be end game prior to more serious decline on larger Intermediate Cycle.
  • Lingering negative divergence by Daily MAAD is suggestion Smart Money has been doing more selling into strength over past several weeks than buying.
  • If market fails short of March/April highs (1422.38--S&P 500), turns negative on Minor Cycle, and then threatens reversal of Intermediate Cycle positive, long-term uptrend stretching back to March 2009 lows would almost immediately become an issue since that trendline is now approximately coincident with June lows (1266.74—S&P 500).
  • If recent rally is legitimate and has more room to go on upside, where’s indicator corroboration? We cannot remember instance where market powered higher on long term indefinitely without confirmation from key indicators.

cumulative, volume, s&p

cumulative, volume, emini

Index Daily/Weekly/Monthly Stops Weekly Monthly
 

8/13

8/14

8/15

8/16

8/17

8/17

8/31

S&P 500 Index

SELL
1368.71

SELL
1374.90

SELL
1380.21

SELL
1384.83

SELL
1387.77

SELL
1313.24

SELL
1229.29

Dow Jones Industrials

SELL
12917.38

SELL
12966.68

SELL
13004.56

SELL
13035.18

SELL
13052.24

SELL
12438.80

SELL
11829.11

NASDAQ Composite

SELL
2925.28

SELL
2942.56

SELL
2957.09

SELL
2969.56

SELL
2978.92

SELL
2825.49

SELL
2616.71

Value Line Index

SELL
2841.27

SELL
2856.03

SELL
2871.73

SELL
2887.27

SELL
2899.77

SELL
2780.15

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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