Market demonstrates little conviction up, or down

MAAD, CPFL indicator review

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

 

Market Snapshot for session ending 10-03-12
 

Last

Day Change

%Change

S&P 500 Index

1450.99

+5.24

+.36%

Dow Jones Industrials

13494.61

+12.24

+.09%

NASDAQ Composite

3135.22

+15.18

+.49%

Value Line Arithmetic Index

3068.65

-1.15

-.04%

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:

  • S&P 500, NASDAQ Composite, and Value Line index posted fractional gains Tuesday while Dow Jones Industrials lost marginal ground.
  • NYSE trading volume declined 11% Tuesday and Average Price per Share rose 14 cents to $61.54.
  • Short-term trend remains negative unless S&P 500 rises above upper edge of trailing 10-Day Price Channel (1459.80 through Wednesday).
  • Intermediate Cycle remains positive until lower edge of 10-Week Price Channel (1374.62 through October 5).
  • MAAD was positive Tuesday with 12 issues higher and 7 lower. Daily indicator was last below July 3 peak while holding well below March 20 high to suggest Smart Money remains skeptical of this market.
  • MAAD Daily Ratio remains in “Oversold” territory at .79.
  • CPFL was decidedly negative Tuesday by 2.33 to 1 and remains below September short to intermediate high. Indicator is nowhere close to major resistance made week of February 25, 2011.
  • CPFL Daily Ratio has moved back toward “Neutral” (1.30) from extremely “Overbought” levels.

Market Overview – What We Think:

  • With Minor Cycle stats now ranging from “Neutral” to “Oversold,” notably in Daily MAAD and CPFL, it remains to be seen whether or not market action over past two weeks will prove to be another corrective phase in Intermediate Cycle advance initiated after June lows, or something else.
  • To resolve issue negatively, S&P 500 must sell below rising uptrend line (last near 1410) with follow through weakness below lower edge of 10-Week Price Channel (1374.62). Weakness below latter point would almost certainly terminate four-month-old rally.
  • In meantime, nothing but strength back above September 14 intraday high (1474.51) would re-assert Intermediate Cycle advance. Between here and there (uptrend/Price Channel and resistance) coin will continue to flip.
  • Indicators such as Daily Most Actives Advance/Decline Line (MAAD) still suggest market has gotten way ahead of itself. Daily MAAD has come nowhere near overcoming March 20 resistance high even though indicator participated, albeit feebly, on upside after June lows. MAAD failure hints Smart Money has only been buying a bit more than it has been selling over past few months.

cumulative, volume, s&p

cumulative, volume, emini

Index Daily / Weekly / Monthly Stops Weekly Monthly
 

10/1

10/2

10/3

10/4

10/5

10/5

10/31

S&P 500 Index

BUY  1462.89

BUY  1463.55

BUY  1459.80

BUY  1457.58

BUY  1455.04

SELL  1374.62

SELL  1269.05

Dow Jones Industrials

BUY  13598.43

BUY  13609.23

BUY  13589.90

BUY  13576.29

BUY  13557.20

SELL  12887.24

SELL  12141.09

NASDAQ Composite

BUY  3181.78

BUY  3182.68

BUY  3171.87

BUY  3165.52

BUY  3157.91

SELL  2960.06

SELL  2716.62

Value Line Index

BUY  3133.68

BUY  3131.78

BUY  3118.39

BUY  3109.23

BUY  3099.22

SELL  2886.89

SELL  2723.41

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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