Stock market calm before more buying -- or before storm?

Poised for movement...

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

Market Snapshot for session ending 09-18-12

 

Last

Day Change

%Change

S&P 500 Index

1459.32

-1.86

-.13%

Dow Jones Industrials

13564.64

+11.54

+.09%

NASDAQ Composite

3177.80

-.87

-.03%

Value Line Arithmetic Index

3122.73

-11.15

-.36%

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:

  • Major indexes closed mixed Tuesday and within range of last Thursday’s final levels in wake of strength that moved prices to targeted upside levels on Minor Cycle.
  • NYSE trading volume declined nearly 5% Tuesday compared to Monday’s levels. Average Price per Share gained 22 cents to $62.15.
  • All cycles including Short, Intermediate, and Major remain positive, but “Overbought.”
  • To suggest Minor Cycle negative, S&P 500 must sell below lower edge of 10-Day Price Channel (1419.21 through Wednesday). Intermediate trend remains positive until lower edge of 10-Week Price Channel (1356.50 through September 21).
  • Daily MAAD was flat Tuesday with 10 issues higher and 10 lower. Daily MAAD Ratio was moderately “Overbought” (1.65). Daily MAAD advanced above July 3 resistance high last Thursday, but remains well below March 20 high.
  • Daily CPFL was positive Tuesday by 3.4 to 1 and reached new short to intermediate-term high on Cumulative basis. Daily CPFL Ratio was “Overbought” at 2.89.

Market Overview – What We Think:

  • Following last Thursday’s price high in S&P 500 (1474.51) and attainment of short-term measured move target from small bull “flag,” it remains to be seen if that intraday high was top of short-term rally or merely a point of relative quiet prior to further buying.
  • Short-term “Overbought” conditions could make any further gains from current levels difficult, however.
  • While strength last week with coincident gains by MAAD, CPFL, and CV to new short-term highs bolstered Minor and Intermediate Cycles, fact that all of our key indicators continue to hold well below early 2011 highs does nothing for positive flavor of long-term trend.
  • Short-term Momentum has also confirmed NONE of strength over past several weeks to suggest market, despite recent price strength, has lost some its upward impetus compared to earlier stages.
  • Nonetheless, Minor and Intermediate Cycles remain viable to extent both are still positive. We would first need to see negative reversal of short-term trend to suggest possible weakening of the larger intermediate.
  • 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.

volume, cumulative, s&p

volume, cumulative, emini

Index Daily / Weekly / Monthly Stops Weekly Monthly
 

9/17

9/18

9/19

9/20

9/21

9/21

9/30

S&P 500 Index

SELL 1411.16

SELL 1415.01

SELL 1419.21

SELL 1423.33

SELL 1431.43

SELL 1356.50

SELL 1256.02

Dow Jones Industrials

SELL 13103.90

SELL 13135.07

SELL 13175.42

SELL 13212.86

SELL 13283.83

SELL 12779.71

SELL 12029.08

NASDAQ Composite

SELL 3076.35

SELL 3081.85

SELL 3086.73

SELL 3093.47

SELL 3107.26

SELL 2906.06

SELL 2685.41

Value Line Index

SELL 2996.29

SELL 3010.24

SELL 3024.89

SELL 3038.31

SELL 3060.10

SELL 2843.10

SELL 2702.37

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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