S&P, Nasdaq confirm strength as short-term trend strengthens

MAAD, CPFL indicator review

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

 

Market Snapshot for session ending 12-11-12
 

Last

Day Change

%Change

S&P 500 Index

1427.84

+9.29

+.65%

Dow Jones Industrials

13248.44

+78.56

+.60%

NASDAQ Composite

3022.30

+35.34

+1.18%

Value Line Arithmetic Index

3118.41

+24.51

+.79%

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

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

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

Market Overview – What We Know:

  • S&P 500 and NASDAQ Composite got in synch with Dow 30 and Value Line index on upside Tuesday when all four indexes rallied to new short-term highs and best levels since November 16 intraday lows (1343.35—S&P 500).
  • Market volume kept pace with strength and rose 20% vs. Monday’s levels.
  • Short-term trend remains positive with S&P 500 needing to sink below lower edge of 10-Day Price Channel (1401.80 through December 12) to suggest reversal of near-term trend to negative.
  • Intermediate Cycle remains positive until S&P 500 moves above upper edge of 10-Week Price Channel (1449.74 through December 14).
  • Daily MAAD rallied to new short-term high Tuesday and back above resistance point made September 14 when S&P hit short to intermediate high at 1474.51. Major resistance high in Daily MAAD holds back at March 20 peak, however. Daily MAAD was favorable by 4 to 1 Tuesday with 16 issues positive and 4 negative. Daily MAAD Ratio was last “Overbought” at 2.10.
  • Daily CPFL was positive Tuesday by 3.46 to 1 and Daily CPFL Ratio was last moving into ‘Overbought” territory at 1.65.
  • Despite Tuesday’s gains, Cumulative Volume in both S&P 500 and S&P Emini continues to under perform S&P pricing since November 16 S&P 500 low (1343.35).

Market Overview – What We Think:

  • Fact S&P 500 and NASDAQ Composite rallied to new short-term highs Tuesday on heels of Dow 30 and Value Line index strength re-asserted short-term strength, but in face of developing “Overbought” conditions, it now remains to be seen how much further strength will carry.
  • With S&P just over 20 points below upper edge of 10-Week Price Channel, and point to surpass to suggest intermediate-term to reversal, time is nonetheless running out on bearish theme.
  • Strength by Daily MAAD to new short-term high above September 14 resistance point when S&P peaked on short to intermediate cycles (1474.51) is indicative of improving market underpinnings. Improving volume numbers are also encouraging.
  • But until S&P rallies above September long-term resistance high, any strength back toward that level could prove to be nothing but reflex rally into longer-term top.

sp, cumulative, volume

emini, cumulative, volume

Index Daily / Weekly / Monthly Stops Weekly Monthly
 

10/10

12/11

12/12

12/13

12/14

12/14

12/31

S&P 500 Index

SELL 1399.52

SELL 1401.55

SELL 1401.80

SELL 1403.07

SELL 1404.89

BUY 1449.74

SELL 1293.26

Dow Jones Industrials

SELL 12889.78

SELL 12908.81

SELL 12918.45

SELL 12939.40

SELL 12968.14

BUY 13465.50

SELL 12313.37

NASDAQ Composite

SELL 2967.92

SELL 2973.92

SELL 2974.04

SELL 2973.67

SELL 2973.63

BUY 3090.05

SELL 2772.87

Value Line Index

SELL 3024.94

SELL 3033.15

SELL 3038.81

SELL 3045.07

SELL 3051.65

BUY 3098.24

SELL 2758.13

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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