Low stock market volume continues to shadow gains

MAAD, CPFL indicator review

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

 

Market Snapshot for session ending 11-28-12
 

Last

Day Change

%Change

S&P 500 Index

1409.93

+10.99

+.79%

Dow Jones Industrials

12985.11

+106.98

+.83%

NASDAQ Composite

2991.77

+23.98

+.81%

Value Line Arithmetic Index

3047.02

+23.36

+.77%

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

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:

  • Minor Cycle accrued bit more traction Wednesday when all of major indexes posted gains.
  • Market volume was slightly below Tuesday’s levels.
  • S&P 500 would need to sell below lower edge of 10-Day Price Channel (1366.02) to suggest reversal of near-term trend to negative.
  • Intermediate cycle remains positive until S&P 500 rallies above upper edge of 10-Week Price Channel (1456.37 through November 30).
  • Daily MAAD was positive Wednesday by 17 to 1 and Daily MAAD Ratio was last into extremely “Overbought” territory at 1.88.
  • Daily CPFL was decidedly negative Wednesday by 1.41 to 1. Daily CPFL Ratio continues to work higher toward “Neutral” and was last at .86.
  • Cumulative Volume in both S&P 500 and S&P Emini continue to under perform S&P pricing to suggest lack of upside conviction.

Market Overview – What We Think:

  • While short-term trend has reversed to positive, continuing low volume as reflected in Cumulative Volume numbers and elimination of recently “Oversold” short-term stats should presage near-term high.
  • We suspect any further strength will prove to be unsustainable longer-term and will not cause larger Intermediate Cycle to reverse to positive with gains above upper edge of 10-Week Price Channel (1456.37—S&P 500).
  • “Neutral” to “Overbought” conditions within context of Intermediate Cycle negative would be suggestive of countertrend short-term rally.
  • Ultimately, extent to which September/October highs (1474.51—S&P 500) might be seriously challenged could determine whether or not strength is merely brief upside feint in Intermediate Cycle negative, or beginning of new intermediate advance.
  • How price action plays out will also determine status of Major Cycle uptrend in effect since March 2009.

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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