Stock market up ahead of voting but lacks breadth

Stock chart, technical analysis

Market Overview – What We Know:

• In face of short-term “Oversold” conditions, major indexes posted small gains Monday.
• Trading volume on NYSE relative to Friday’s activity declined 24%. Average Price per Share gained $1.83 to $62.48.
• Minor Cycle remains negative until S&P rises above upper edge of 10-Day Price Channel (1433.67 through Tuesday).
• While S&P was unable to decisively break below 10-Week Price Channel (1413.38 through November 2) to suggest reversal to Intermediate Cycle negative, fact Dow 30, NASDAQ, and Value Line index did is reason to suggest Intermediate Cycle has taken on more negative outlook. As a consequence, S&P must now rise above upper edge of 10-Week Price Channel (1451.21) to create new intermediate uptrend.
• Major resistance and point to overcome to re-assert long-term uptrend in S&P 500 remains at 1474.51 created on September 14.
• Daily MAAD was positive Monday with 14 issues higher, 5 lower, and one unchanged. Daily MAAD Ratio remains “Oversold” (.77).
• Daily CPFL was negative Monday by 1.25 to 1 with Daily CPFL Ratio remaining “Oversold” (.78).

Market Overview – What We Think:

• We continue to believe Intermediate Cycle uptrend begun in early June is over and September 14 intraday highs (1454.71—S&P 500) will not be seriously unchallenged for foreseeable future.
• But hesitation in vicinity of lower edges of 10-Week Price Channels by major indexes last week with short-term “Oversold” conditions prevailing could result in some near-term rebounding in sessions just ahead.
• We suspect any near-term rally that develops could be short-lived and would produce no more than “Neutral” short-term readings. Such conditions should precede setup for resumption of larger intermediate-term negative.
• How new intermediate-term negative plays out could determine staying power of Major Cycle trend which is challenged in terms of “Overbought” conditions and lack of solid indicator underpinnings.

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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