Market higher as 2012 closes, near-term looking stronger

MAAD, CPFL indicator review

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

 

Market Snapshot for session ending 12-31-12
 

Last

Day Change

%Change

S&P 500 Index

1426.19

+23.75

+1.69%

Dow Jones Industrials

13104.14

+166.02

+1.28%

NASDAQ Composite

3019.51

+59.20

+2.00%

Value Line Arithmetic Index

3164.70

+58.29

+1.68%

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

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:

  • On last day of trading year, major indexes posted strong gains Monday.
  • Market volume rose 35% compared to last Friday’s levels, but activity remained below normal.
  • Despite Monday’s strength, short-term trend remains negative with S&P 500 continuing to hold below upper edge of 10-Day Price Channel (1439.28 thorough Wednesday).
  • Intermediate Cycle remains negative with S&P remaining below upper edge of 10-Week Price Channel (1426.37 through January 4). But margin of negativity with improving short-term trend is fading.
  • Daily MAAD was decidedly positive Monday with 19 issues higher and none negative. One was unchanged. Daily MAAD Ratio was last near “Neutral” at 1.04.
  • Daily CPFL was sharply positive Monday by 8.5 to 1. Daily CPFL Ratio remains “Overbought” at 2.80.

Market Overview – What We Think:

  • Monday’s strong gains, despite lower than normal volume, have left window open for a continuation of gains. Strength has occurred coincident with “Neutral” to slightly “Oversold” near-term conditions and our Call/Put Dollar Value Flow Line (CPFL) popped to a new short-term high Monday on heavy options Dollar Value volume. While Daily CPFL Ratio is “Overbought,” direction of indicator is bullish.
  • Also, given proximity of pricing to December 18 S&P high (1448.00), we cannot rule out possibility weakness over past several sessions has merely been corrective in nature.
  • But until S&P 500 is able to rally above September high (1474.51), long-term trend initiated in March 2009 remains in doubt.
  • Daily MAAD made new short-term high December 20, but indicator must continue upward and above March 20 resistance peak to suggest confirmation of long-term bull.

cumulative, volume, sp 

emini, cumulative, volume

Index Daily / Weekly / Monthly Stops Weekly Monthly
 

12/31

1/1

1/2

1/3

1/4

1/4

1/31

S&P 500 Index

BUY 1439.28

HOL

BUY 1436.90

BUY 1419.99

BUY 1431.43

BUY 1426.37

SELL 1310.68

Dow Jones Industrials

BUY 13302.30

HOL

BUY 13264.12

BUY 13240.04

BUY 13210.95

BUY 13211.89

SELL 12445.73

NASDAQ Composite

BUY 3033.90

HOL

BUY 3029.59

BUY 3023.22

BUY 3016.11

BUY 3019.26

SELL 2809.46

Value Line Index

BUY 3157.12

HOL

BUY 3137.02

BUY 3131.38

BUY 3127.88

SELL 2965.34

SELL 2779.90

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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