Stock indexes up, technical indicator hits new minor high Monday

MAAD, CPFL indicator review

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


Market Snapshot for session ending 12-17-12


Day Change


S&P 500 Index




Dow Jones Industrials




NASDAQ Composite




Value Line Arithmetic Index




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 posted strong gains Monday, but none rallied to new short-term highs above December 12 intraday peaks (1438.59—S&P 500).
  • Overall market trading volume rose 7% compared to last Friday’s levels.
  • Minor Cycle uptrend initiated after November 16 lows (1343.35—S&P 500) remains intact and S&P would need to sell below lower edge of 10-Day Price Channel (1409.72 through Tuesday) to suggest end to that trend and beginning of Minor Cycle negative.
  • Intermediate Cycle remains negative until S&P 500 moves above upper edge of 10-Week Price Channel (1437.85—S&P 500 through December 21).
  • Daily MAAD was rallied to new short-term high Monday with 16 issues positive and 4 negative. Daily MAAD Ratio remains “Overbought” at 1.87. Despite new near-term high, indicator holds well below major resistance peak reached back on March 20.
  • Daily CPFL was positive Friday by 1.86 to 1 with Daily CPFL Ratio was near “Neutral” at 1.05.
  • 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:

  • Fact that major indexes were positive Monday was encouraging from a bullish point of view, given increasing volume and new short-term high in Daily MAAD. But since none of indexes reached new near-term highs (above 1438.59—S&P 500), whether or not Minor Cycle is sustainable remains key question in face of near-term “Overbought” levels.
  • Lacking such action and fact larger Intermediate Cycle remains negative, we must continue to view all short-term strength as mere “return action” in larger cycle negative.
  • Underlying longer-term concerns is fact that Cumulative Volume has not only failed to keep pace with index pricing since November 16, but CV has remained relatively weak for months.
  • Nothing but strength above September 14 major resistance high (1474.51—S&P 500), would re-assert Major Cycle advance begun in March 2009.

cumulative, volume

emini, cumulative, volume


Daily / Weekly / Monthly Stops











S&P 500 Index

SELL 1407.21

SELL 1409.72

SELL 1413.36

SELL 1414.29

SELL 1414.35

BUY 1437.85

SELL 1293.26

Dow Jones Industrials

SELL 13100.74

SELL 13143.49

SELL 13084.95

SELL 13104.60

SELL 13115.68

BUY 13355.17

SELL 12313.37

NASDAQ Composite

SELL 2973.58

SELL 2979.04

SELL 2984.64

SELL 2984.22

SELL 2980.62

BUY 3053.48

SELL 2772.87

Value Line Index

SELL 3058.63

SELL 3066.86

SELL 3076.33

SELL 3080.07

SELL 3083.10

SELL 2983.83

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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