Prices confirm stock uptrend, as indicators remain skeptical

MAAD, CPFL indicator review

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

 

Market Snapshot for session ending 1-10-13
 

Last

Day Change

%Change

S&P 500 Index

1472.12

+11.10

+.76%

Dow Jones Industrials

13471.22

+80.71

+.60%

NASDAQ Composite

3121.75

+15.94

+.51%

Value Line Arithmetic Index

3283.56

+15.43

+.47%

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:

  • Major indexes rallied modestly Thursday when S&P 500 hit best close in more than five years and Value Line index rallied to new all-time high. Dow Jones Industrial Average and NASDAQ Composite continue to lag and remain below September resistance highs.
  • Trading volume increased by 4% compared to Wednesday.
  • S&P 500 remains positive on short-term trend and must sell below lower edge of 10-Day Price Channel (1427.67 through Friday) to suggest Minor Cycle negative. Intermediate Cycle remains positive until lower edge of 10-Week Price Channel at 1385.21.
  • Daily MAAD was positive Thursday with 17 issues higher and 3 lower, but indicator continues to hold below December 20 short-term high in spite of fact S&P bettered equivalent level in subsequent trading. As a consequence, short-term negative divergence persists. Daily MAAD Ratio was marginally “Overbought” at 1.21.
  • Daily CPFL was positive Thursday by 1.39 to 1, hit new short-term high and best level since November lows. CPFL remains within range of September 24 resistance high. Daily CPFL Ratio remains “Overbought” at 1.93.

Market Overview – What We Think:

  • S&P’s move to best level since November 16 low (1343.35) and highest closing level since December 2007 is encouraging, but bellwether has also failed to overcome September 14 intraday resistance high (1474.51) with coincident failure by Daily MAAD to confirm S&P strength. As a consequence, note of caution is still warranted.
  • But we cannot deny short-term uptrend in prices and fact all cycles, Minor, Intermediate, and Major remain positive, despite lack of indicator underpinnings including lingering weakness in MAAD, CPFL, Cumulative Volume, and Momentum, proof yet again that price is final arbiter profit.

volume 

volume

Index Daily / Weekly / Monthly Stops Weekly Monthly
 

1/7

1/8

1/9

1/10

1/11

1/11

1/31

S&P 500 Index

SELL 1416.53

SELL 1412.70

SELL 1414.23

SELL 1420.87

SELL 1427.67

SELL 1385.21

SELL 1310.68

Dow Jones Industrials

SELL 13079.42

SELL 13036.99

SELL 13038.90

SELL 13087.55

SELL 13137.17

SELL 12835.98

SELL 12445.73

NASDAQ Composite

SELL 2988.34

SELL 2981.17

SELL 2997.81

SELL 3014.06

SELL 3028.65

SELL 2926.34

SELL 2809.46

Value Line Index

SELL 3127.88

SELL 3123.00

SELL 3129.58

SELL 3149.28

SELL 3168.22

SELL 2976.50

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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