S&P E-mini, OEX 100 hit new highs, but S&P 500, Dow 30 do not

NYSE trading volume rose 19% Thursday

Stock index, chart, analysis, bull shadow Stock index, chart, analysis, bull shadow

Market Snapshot for session ending 08-16-12

 

Last

Day Change

%Change

S&P 500 Index

1415.51

+9.98

+.71%

Dow Jones Industrials

13250.11

+85.32

+.65%

NASDAQ Composite

3062.39

+31.46

+1.04%

Value Line Arithmetic Index

2990.06

+30.59

+1.03%

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 powered higher Thursday and moved within range of late March/early April resistance highs. Only S&P 100 and S&P 500 Emini have hit new highs, however. S&P 500 needs another 4.95 points to surpass April 2 peak at 1422.38 while Dow Jones Industrials need another 69.32 points to overcome May 1 high at 13338.66. .
  • NYSE trading volume rose 19% Thursday, but was last 1.5% below its 10-Day moving average. Average Price per Share rose 38 cents to $59.56. Highest recent AvgPr/Share was $61.48 hit back on March 15.
  • Short-term trend remains positive until lower edge of 10-Day Price Channel (1387.77 through Friday) 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 Thursday by 15 to 4 and Daily MAAD Ratio was last “Overbought” at 1.72. MAAD continues to hold below peak made July 3.
  • CPFL was positive Thursday by 4.32 to 1 and Daily CPFL Ratio was “Overbought” at 2.14.

Market Overview – What We Think:

  • Thursday’s strength and new high by S&P 500 Emini futures contract notwithstanding, 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 indication 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.

stock, index, cumulative, volume

emini, cumulative volume

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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