Stock market up ahead of voting but lacks breadth

MAAD, CPFL indicator review

Stock chart, technical analysis Stock chart, technical analysis

 

Market Snapshot for session ending 11-5-12
 

Last

Day Change

%Change

S&P 500 Index

1417.26

+3.06

+.22%

Dow Jones Industrials

13112.44

+19.27

+.15%

NASDAQ Composite

2999.66

+17.53

+.59%

Value Line Arithmetic Index

3053.96

+15.80

+.52%

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

Intermediate Cycle (Medium trend lasting weeks to several months) Neutral

Major Cycle (Long-term trend lasting several months to years) Positive

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.

sp, cumulative, volume

emini, cumulative, volume

Index Daily / Weekly / Monthly Stops Weekly Monthly
 

11/5

11/6

11/7

11/8

11/9

 11/9

11/30

S&P 500 Index

BUY
1438.37

BUY
1433.67

BUY
1429.67

BUY
1427.82

BUY
1427.54

BUY
1451.21

SELL
1277.32

Dow Jones Industrials

BUY
13359.82

BUY
13312.41

BUY
13276.34

BUY
13260.17

BUY
13252.01

BUY
13499.72

SELL
12198.68

NASDAQ Composite

BUY
3041.02

BUY
3030.67

BUY
3019.74

BUY
3016.08

BUY
3016.04

BUY
3149.46

SELL
2738.24

Value Line Index

BUY
3041.22

BUY
3032.20

BUY
3027.17

BUY
3033.01

BUY
3041.34

BUY
3093.61

SELL
2734.45

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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