S&P 500 rally Thursday gives more positive tone to market

MAAD, CPFL indicator review

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

 

Market Snapshot for session ending 10-04-12
 

Last

Day Change

%Change

S&P 500 Index

1461.40

+10.41

+.72%

Dow Jones Industrials

13575.36

+80.74

+.60%

NASDAQ Composite

3149.45

+14.23

+.45%

Value Line Arithmetic Index

3094.18

+25.53

+83%

Minor Cycle (Short-term trend lasting days to a few weeks) Neutral / 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 posted modest gains Thursday with S&P 500 index rallying above upper edge of 10-Day Price Channel (1457.58) to suggest more positive tone on Minor Cycle. Dow Jones industrials, NASDAQ Composite, and Value Line index have yet to rise above similar 10-Day Price Channel levels, however.
  • NYSE trading volume rose 1.3% and Average Price per Share rallied 86 cents to $62.56.
  • Intermediate Cycle remains positive until lower edge of 10-Week Price Channel (1374.62 through October 5).
  • MAAD was positive Thursday with 15 issues higher and 5 lower. Daily MAAD must rally above September 14 high to reach best level since June 4 low, but even then would remain well below peak made back on March 20.
  • Daily MAAD Ratio remains “Oversold” at .89.
  • CPFL was positive by 1.33 to 1 Thursday while remaining below September 24 short to intermediate high. Indicator is nowhere close to major resistance made week of February 25, 2011. CPFL Daily Ratio was last toward “Neutral” (1.03).

Market Overview – What We Think:

  • Thursday’s strength in S&P 500 above upper edge of 10-day Price Channel in face of “Neutral” (short-term Momentum) to “Oversold” (MAAD) conditions, could mean September 14 intraday highs (1474.51—S&P 500) could soon be challenged.
  • Question at this point, however, is will those levels be overcome? If so, larger Intermediate Cycle is resumed. If not, Intermediate Cycle would be in jeopardy.
  • Also, a one day upside bullish move by S&P 500 without confirmation by other indexes above similar “Buy/Stop” levels leaves market positivity in question.
  • As a consequence, it remains to be seen whether or not market action over past two weeks, positive S&P action Thursday aside, will prove to be another corrective phase in Intermediate Cycle advance or something else.
  • Indicators such as Daily Most Actives Advance/Decline Line (MAAD) still suggest market has gotten ahead of itself. Daily MAAD has come nowhere near overcoming March 20 resistance high even though indicator participated 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.

volume, cumulative, s&p

cumulative, volume, s&p

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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