Stock market follows negative indicators lower

Sentiment shift

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

Market Snapshot for session ending 08-30-12

 

Last

Day Change

%Change

S&P 500 Index

1399.48

-11.01

-.78%

Dow Jones Industrials

13000.71

-106.77

-.81%

NASDAQ Composite

3048.71

-32.47

-1.05%

Value Line Arithmetic Index

2958.38

-28.86

-.97%

Minor Cycle (Short-term trend lasting days to a few weeks) Negative

Intermediate Cycle (Medium trend lasting weeks to several months)  Positive / Neutral

Major Cycle (Long-term trend lasting several months to years) Neutral / Positive

Market Overview – What We Know:

  • Short-term vulnerability was amplified Thursday when major indexes suffered modest losses. With S&P 500, Dow 30, and Value Line now signaling short-term negatives, only NASDAQ Composite needs to flip to negative.
  • NYSE trading volume was little changed from Wednesday’s levels while Average Price per Share fell 55 cents to $58.70.
  • To reverse new Minor Cycle negative, S&P 500 must rally above upper edge of 10-Day Price Channel (1416.24 through Friday).
  • Intermediate Cycle remains positive and needs weakness below lower edge of 10-Week Price Channel (1323.49 through August 31) to turn negative.
  • Short-term Momentum in S&P 500 turned fractionally negative for first time since July 25, as one of our two proprietary Minor Cycle Trading Oscillators also turned negative. Other oscillator was fading fast toward negative territory. Intermediate Cycle remains toward “Overbought.”.
  • MAAD was sharply negative Thursday with 1 issue positive, 18 negative, and 1 unchanged. MAAD Daily Ratio was moving toward “oversold” territory (.75). Daily MAAD was last plotted about midway between its June 4 low and the July 3 high. Weekly MAAD Ratio was last moderately “Overbought” at 1.29.
  • CPFL was negative Thursday by 1.64 to 1. Some pickup occurred in OEX 100 options volume as compared to Tuesday and Wednesday. CPFL continues to hold below resistance put in place back on April 9. Daily CPFL Ratio was last moving toward “Oversold” (.81) while Weekly CPFL Ratio remains moderately “Overbought” levels.
  • Cumulative Volume (CV) failed to confirm strength into recent S&P 500 short-term high (1426.68).

Market Overview – What We Think:

  • August 21 high in S&P 500 (1426.68) was no doubt a short-term high, but it remains to be seen if that peak will prove to be best level of Intermediate Cycle uptrend in effect since June 4 lows (1266.74—S&P 500).
  • Ongoing negative divergence by Daily MAAD in face of market strength after July 3 when Daily MAAD peaked reflects fact Smart Money has been exiting, if not simply avoiding, equities on net basis for several weeks. Developing short-term “Oversold” readings notwithstanding, odds suggest that in addition to a short term high made August 21, larger cycle to intermediate-term highs may also have been reached.
  • Ongoing negativity on Minor Cycle would threaten reversal of Intermediate Cycle positive and then long-term uptrend stretching back to March 2009 lows. Latter would almost immediately become an issue if Intermediate Cycle turns negative since long-term trendline is now approximately coincident with June lows (1266.74—S&P 500). In other words, if June lows are fractured odds would be good major advance since March 2009 is over.

cumulative, volume, s&p

cumulative, volume, emini

Index

Daily / Weekly / Monthly Stops                                     

Weekly

Monthly

                     8/27          8/28         8/29        8/30       8/31         8/31        8/31

S&P 500 Index

BUY 1412.55

BUY 1415.56

BUY 1416.30

BUY 1416.34

BUY 1416.24

SELL 1323.49

SELL 1229.29

Dow Jones Industrials

BUY 13240.29

BUY 13259.07

BUY 13252.91

BUY 13240.58

BUY 13229.52

SELL 12502.13

SELL 11829.11

NASDAQ Composite

SELL 3029.04

SELL 3036.25

SELL 3041.47

SELL 3044.31

SELL 3045.87

SELL 2840.56

SELL 2616.71

Value Line Index

SELL 2954.59

SELL 2963.05

SELL 2967.45

SELL 2967.73

BUY 2994.82

SELL 2973.41

SELL 2649.82

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