Stock market up amid negative minor cycle

Intermediate cycle 'iffy'

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

 

Market Snapshot for session ending 09-27-12
 

Last

Day Change

%Change

S&P 500 Index

1447.15

+13.83

+.96%

Dow Jones Industrials

13485.97

+72.46

+.54%

NASDAQ Composite

3136.60

+42.89

+1.39%

Value Line Arithmetic Index

3074.63

+33.11

+1.09%

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

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:

  • After three days of net losses, apparent reflex bounce surfaced in major indexes Thursday, but NYSE trading volume declined nearly 14%. Average Price per share gained 23 cents to $61.21.
  • Short-term cycle has signaled a negative reversal while larger Intermediate and Major cycles remain positive and “Overbought.”
  • To suggest Minor Cycle positive, S&P 500 would need to rally first above upper edge of 10-Day Price Channel (1462.30 through Friday) with follow-through buying above September 14 intraday high (1474.51). Strength above latter level would re-assert Intermediate Cycle uptrend that remains positive until lower edge of 10-Week Price Channel (1366.48 through September 28).
  • Daily MAAD was positive Thursday by 16 to 3. Daily MAAD Ratio was toward “Oversold” territory at .84.
  • Daily CPFL was positive by 1.55 to 1 and Daily CPFL Ratio remains “Overbought” at 2.03.

Market Overview – What We Think:

  • It has yet to be decided if short-term high (1474.51) hit by S&P 500 on September 14 will also prove to be top of Intermediate Cycle rally begun back on June 4. Already most short-term stats have dipped back toward “Neutral” with Daily MAAD Ratio already toward “Oversold” territory at .84.
  • Decision point on Intermediate Cycle would come with selling below uptrend line in S&P 500 (near 1415) and then lower edge of 10-Week Price Channel (1366.48 through September 28).
  • Given “Overbought” Intermediate Cycle, burden of proof rests with bulls. Extent to which short-term trend weakens will determine whether or not Intermediate Cycle remains viable.
  • Fact none of our key indicators was able to make new highs with major indexes over past several weeks is additional evidence of change in character of this market.
  • In background it’s important to keep in mind fact market is entering time of year that has proven to be historically vulnerable on occasion -- think 1929, 1987, and 2007.

indicator, cv, s&p

volume, emini

Index Daily / Weekly / Monthly Stops Weekly Monthly
 

9/24

9/25

9/26

9/27

9/28

9/28

9/30

S&P 500 Index

SELL
1437.92

SELL
1443.09

SELL
1447.49

SELL
1449.43

SELL
1452.26

SELL
1366.48

SELL
1256.02

Dow Jones Industrials

SELL
13343.39

SELL
13391.81

SELL
13437.48

SELL
13463.60

SELL
13493.84

SELL
12843.58

SELL
12029.08

NASDAQ Composite

SELL
3121.38

SELL
3133.31

SELL
3143.05

SELL
3148.31

SELL
3155.54

SELL
2935.38

SELL
2685.41

Value Line Index

SELL
3077.56

SELL
3089.79

SELL
3100.02

SELL
3103.02

SELL
3107.07

SELL
2866.89

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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