Stock market continues to look tentative on short-term basis

MAAD, CPFL indicator review

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

 

Market Snapshot for session ending 11-27-12
 

Last

Day Change

%Change

S&P 500 Index

1398.94

-7.35

-.52%

Dow Jones Industrials

12878.13

-89.24

-.69%

NASDAQ Composite

2967.79

-8.99

-.30%

Value Line Arithmetic Index

3023.66

-5.22

-.17%

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

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

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

Market Overview – What We Know:

  • Further profit taking developed in major indexes Tuesday.
  • Market volume was higher by 11% relative to Monday’s levels, but overall activity remains below normal.
  • Short-term trend is positive and would need to sell below lower edge of 10-Day Price Channels (1362.46—S&P 500) to suggest more negative market tone.
  • To reverse Intermediate Cycle to positive S&P 500 would need to rally above upper edge of 10-Week Price Channel (1456.37 through November 30). Major resistance and point to overcome to re-assert long-term uptrend in S&P 500 remains at 1474.51 created September 14 at intraday high.
  • Daily MAAD posted 6 advances and 14 losses Tuesday. Daily MAAD Ratio remains in “Overbought” territory at 1.46.
  • Daily CPFL was decidedly negative Tuesday by 2.39 to 1. Daily CPFL Ratio was moving higher, but was still “Oversold” at .78.

Market Overview – What We Think:

  • While short-term trend has reversed to positive, continuing low volume and elimination of recently “Oversold” short-term stats could lead to near-term top sooner than later.
  • We suspect any further strength will prove to be unsustainable longer-term and will not cause larger Intermediate Cycle to reverse to positive.
  • “Neutral” to “Overbought” conditions in our key indicators could develop relatively quickly and price movement should only retrace a portion of decline since mid-September.
  • Ultimately, extent to which September/October highs (1474.51—S&P 500) are seriously challenged will determine whether or not strength is merely a brief upside feint in Intermediate Cycle negative, or if it will develop into full-fledged intermediate reversal to positive.
  • How price movement plays out will determine status of Major Cycle uptrend in effect since March 2009.

cumulative, volume

cumulative, volume, emini

Index Daily / Weekly / Monthly Stops Weekly Monthly
 

11/26

11/27

11/28

11/29

11/30

11/30

 

S&P 500 Index

SELL 1364.20

SELL 1361.33

SELL 1362.46

SELL 1366.02

SELL 1370.46

BUY 1456.37

SELL 1277.32

Dow Jones Industrials

SELL 12660.35

SELL 12629.03

SELL 12626.01

SELL 12645.95

SELL 12676.05

BUY 13540.25

SELL 12198.68

NASDAQ Composite

SELL 2865.38

SELL 2863.38

SELL 2865.20

SELL 2872.11

SELL 2884.42

BUY 3126.60

SELL 2738.24

Value Line Index

SELL 2929.34

SELL 2920.87

SELL 2922.64

SELL 2929.26

SELL 2939.54

BUY 3101.06

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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