S&P 500 erodes, but Value Line at all-time high

MAAD, CPFL indicator review

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

 

Market Snapshot for session ending 1-3-13
 

Last

Day Change

%Change

S&P 500 Index

1459.37

-3.05

-.21%

Dow Jones Industrials

13391.36

-21.18

-.16%

NASDAQ Composite

3100.56

-11.69

-.38%

Value Line Arithmetic Index

3250.37

+3.85

+.12%

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

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

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

Market Overview – What We Know:

  • New short-term highs were reached by all of major indexes Thursday, but only Value Line index finished in plus column and at new all-time high. S&P 500, Dow 30, and NASDAQ suffered small losses.
  • An increase of just over 17% was registered by market volume compared to Wednesday’s levels.
  • Minor Cycle remains positive in S&P 500 with bellwether needing to sell below lower edge of 10-Day Price Channel (1419.99 through Friday) to suggest short-term negative. Intermediate Cycle remains positive in S&P.
  • Daily MAAD was negative Thursday with 8 issues up and 12 down. Daily MAAD Ratio remains near “Neutral” at .92. Daily MAAD also continues to hold below December 20 short-term high, despite S&P bids above equivalent level.
  • Daily CPFL hit another short-term high Thursday with Calls on a Dollar Value basis exceeding Puts by 2.1 to 1. Daily CPFL Ratio remains “Overbought” at 2.69.

Market Overview – What We Think:

  • Wednesday’s powerful rally in major indexes with new all-time high in Value Line index leaves question hanging in air – was rally a short-term flourish with no staying power, or was it beginning of something larger? Thursday’s mixed market did not answer question.
  • While Value Line strength remains impressive, S&P 500, Dow 30, and NASDAQ Composite must follow suit with strength above September/October highs (1474.51—S&P 500) to foster broad confirmation.
  • So far, it looks as if VAY move has been prescient relative to resumption of bull trend begun in March 2009, but in addition to other index strength we must also see MAAD and CPFL overcome key resistance made in September and in case of MAAD, the peak back in March.
  • But even if S&P betters September high, index would be nowhere near overcoming October 2007 peak at 1576.09.

cumulative, volume

cumulative, volume, emini

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

SELL 1423.86

SELL 1419.99

SELL 1385.41

SELL 1310.68

Dow Jones Industrials

BUY 13302.30

HOL

BUY 13264.12

SELL 13154.68

SELL 13118.04

SELL 12851.05

SELL 12445.73

NASDAQ Composite

BUY 3033.90

HOL

BUY 3029.59

SELL 3003.96

SELL 2994.87

SELL 2927.92

SELL 2809.46

Value Line Index

BUY 3157.12

HOL

BUY 3137.02

SELL 3137.02

SELL 3131.38

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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