Stock majors close to resistance, but key indicators lacking

Weekly Review: Can stock indexes continue making gains?

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Market Snapshot:

 

Last

Week Chg

Week %Chg

S&P 500 Index

1418.16

+12.29

+.87%

Dow Jones Industrials

13275.20

+67.25

+.50%

NASDAQ Composite

3076.59

+55.73

+1.84%

Value Line Arithmetic Index

3007.70

+50.70

+1.71%

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

Not…

Except for the S&P 100 and the S&P 500 Emini last week, the S&P 500 cash index, Dow Jones Industrial Average, NASDAQ Composite, Value Line index, Russell 2000, Dow Jones 20 and 15, and the AMEX Composite index did not overcome major resistance to re-assert major cycle uptrends begun in March 2009. And while the S&P Emini eked out a fractionally higher high (1416.75) to better its March 27 intraday high (1413.25), Cumulative Volume (CV) in the futures contract remains at levels quoted when the S&P 500 was near 1370. Divergent action was much the same in the other bellwether indexes.

The main point is that after another week of marginal gains, the stock market, as measured by the major indexes, has yet to decisively break above the spring highs to confirm a reassertion of the major uptrend begun over 3 ½ years ago.

Market Overview – What We Know:

  • Major indexes posted marginal gains last week with S&P 500 Emini futures contract and S&P 100 bettering late March and early April resistance highs. S&P 500, Dow 30, NASDAQ Composite, Russell 2000, Value Line index, and other major indexes have yet to overcome key resistance, however.
  • NYSE trading volume declined again last week and was down over 10%. Average Price per Share rose 61 cents to $59.82. Highest recent AP/S was $61.48 hit back on March 15.
  • Short-term trend remains positive until lower edge of 10-Day Price Channel (1390.38 through Monday) while Intermediate Cycle would require weakness below lower edge of 10-Week Price Channel (1319.82 through August 24) to turn negative.
  • Short-term Momentum was last positive in S&P 500, but has confirmed none of new highs made over past several sessions.
  • Similarly, while Intermediate Cycle Momentum remains positive, even if S&P 500 rallies above April high (1422.38), Momentum would likely not confirm strength.
  • Our proprietary Trading Oscillators remain positive, but “Overbought,” on both Minor and Intermediate Cycles.
  • Daily MAAD was positive by 11 to 9 last week, but was heading toward “Overbought” territory via the Weekly MAAD Ratio. Indicator continues to hold well below peak made July 3.
  • CPFL was positive last week by 4.92 to 1. CPFL Daily and Weekly Ratios continue to move toward “Overbought.”
  • Despite strength in S&P 500 Emini last week above March resistance high, Cumulative Volume (CV) did not confirm price action.

Will index pricing continue to fail, or will the short to intermediate-term advance begun after the June 4 lows exert enough upward pressure to push aside resistance highs (1422.38—S&P 500)? Maybe. The Minor, Intermediate, and Major Cycle trends remain positive while continuing to hold above trailing 10-bar Price Channels. To suggest at least a Minor Cycle reversal, the S&P 500 would need to sink below the lower edge of its 10-day Price Channel at 1390.38.

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