S&P rallies from bull flag, reaches toward near-term target

Completion of bullish pattern sees big gains

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

Market Snapshot for session ending 09-13-12

 

Last

Day Change

%Change

S&P 500 Index

1459.99

+23.42

+1.63%

Dow Jones Industrials

13539.86

+206.51

+1.55%

NASDAQ Composite

3155.82

+41.51

+1.33%

Value Line Arithmetic Index

3126.42

+39.21

+1.27%

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) Positive

Market Overview – What We Know:

  • Sharp gains in major indexes Thursday resulted in new Intermediate Cycle highs in S&P 500, Dow Jones Industrial Average, NASDAQ Composite, and Value Line index.
  • Break to upside resolved week of lateral action in S&P 500 while also causing S&P to reach upside target as calculated from short-term ‘bull flag’ formation.
  • All cycles remain positive, but “Overbought.”
  • To suggest Minor Cycle negative S&P 500 must sell below lower edge of 10-Day Price Channel (1406.77 through Friday). Intermediate trend remains positive until lower edge of 10-Week Price Channel (1344.26 through September 14).
  • NYSE trading volume rose 21% Thursday while Average Price per Share rallied $1.53 to $62.47 and eclipsed high at $61.48 made March 15.
  • Daily MAAD rose above its July 3 resistance high, but remains well below peak made back on March 15. CPFL rallied above first resistance made back on April 9. Daily Ratios in both MAAD and CPFL are trending back toward “Overbought” levels (MAAD last at 1.45 and CPFL at 1.96).
  • Cumulative Volume (CV) in both S&P 500 and S&P Emini rallied to new Intermediate highs Thursday.

Market Overview – What We Think:

  • Thursday’s strong gains in major indexes with modest confirmation from MAAD, CPFL, and CV above first resistance lent some credence to resumption of intermediate uptrend, but fact none of indicators is anywhere near overcoming major resistance detracts from price optimism.
  • Fact that short-term Momentum has also confirmed none of strength over past several weeks is a concern, given fact short-term stats have returned to “Overbought” conditions across indicator spectrum as Intermediate Cycle has remained “Overbought."
  • Nonetheless, Intermediate Cycle remains viable and we would first need to see negative reversal of short-term trend to suggest possible weakening of larger cycle if more selling follow-through develops.
  • In background it’s important to keep in mind fact market is entering time of year that has proven to be historically vulnerable -- think 1929, 1987, and 2007.

cumulative, volume, s&p

indicator, technical, volume, emini

Index

Daily / Weekly / Monthly Stops

Weekly

Monthly

 

9/10

9/11

9/12

9/13

9/14

9/14

9/30

S&P 500 Index

SELL
1402.83

SELL
1401.37

SELL
1401.05

SELL
1401.36

SELL
1406.77

SELL
1344.26

SELL
1256.02

Dow Jones Industrials

SELL
13055.15

SELL
13035.17

SELL
13027.36

SELL
13027.39

SELL
13068.99

SELL
12680.65

SELL
12029.08

NASDAQ Composite

SELL
3053.55

SELL
3050.95

SELL
3052.75

SELL
3055.71

SELL
3069.09

SELL
2879.61

SELL
2685.41

Value Line Index

SELL
2962.80

SELL
2959.50

SELL
2961.79

SELL
2965.54

SELL
2980.54

SELL
2819.41

SELL
2702.37

Next page: Indicator review

Page 1 of 2 >>
Comments
comments powered by Disqus