Stock market looking tired on short-term cycle

MAAD, CPFL indicator review

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

 

Market Snapshot for session ending 12-13-12
 

Last

Day Change

%Change

S&P 500 Index

1419.45

-9.03

-.63%

Dow Jones Industrials

13170.72

-74.73

-.56%

NASDAQ Composite

2992.16

-21.65

-.72%

Value Line Arithmetic Index

3094.77

-16.56

-.53%

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

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

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

Market Overview – What We Know:

  • Major indexes lost ground Thursday as more profit taking set in.
  • Market volume rose 1.4% compared to Wednesday.
  • Short-term trend remains positive with S&P 500 only needing to sink below lower edge of 10-Day Price Channel (1404.89 through Friday) to indicate reversal of near-term trend to negative.
  • Intermediate Cycle remains negative until S&P 500 moves above upper edge of 10-Week Price Channel (1449.74 through December 14).
  • Daily MAAD was net negative Thursday with 5 issues positive and 15 negative. Indicator remains above resistance point made September 14 when S&P hit short to intermediate high at 1474.51, but holds well below major resistance peak reached back on March 20. Daily MAAD was negative by 3 to 1 Thursday and Daily MAAD Ratio remains moderately “Overbought” at 1.43.
  • Daily CPFL was negative Thursday by 1.30 to 1 and Daily CPFL Ratio was just above “Neutral” at 1.09.
  • Cumulative Volume in S&P 500 and S&P Emini has continued to under perform S&P cash pricing since November 16 S&P 500 low (1343.35).

Market Overview – What We Think:

  • We suspect time is running out on short-term uptrend in effect since November 16 lows (1343.35—S&P 500). In fact, Wednesday’s intraday high (1438.59—S&P 500) could prove to be the high for that several-weeks-old uptrend.
  • In face of near-term “Overbought” conditions and fact index pricing has yet to overcome major resistance at September/October highs, we think recent strength could prove to be countertrend bounce in otherwise negative intermediate trend.
  • Rally by Daily MAAD to new short-term high Wednesday suggested confirmation of recent market gains, given proximity of S&P pricing to upper edge of 10-Week Price Channel and point to surpass to suggest intermediate-term to reversal, but bullish case must still be proven, longer-term.
  • In addition, until S&P rallies above September major resistance high (1474.51), any gains back toward that level could prove to be nothing but reflex rally into longer-term top.

cumulative, volume, sp

cumulative, volume, emini

Index Daily / Weekly / Monthly Stops Weekly Monthly
 

12/10

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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