Monday's mixed stock market lacks conviction

MAAD, CPFL indicator review

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

 

Market Snapshot for session ending 1-14-13
 

Last

Day Change

%Change

S&P 500 Index

1470.68

-1.37

-.09%

Dow Jones Industrials

13507.32

+18.89

+.14%

NASDAQ Composite

3117.50

-8.13

-.26%

Value Line Arithmetic Index

3286.62

+.73

+.02%

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:

  • Mixed readings were reflected by major indexes Monday with S&P 500 and NASDAQ Composite down a bit and Dow 30 and Value Line index up a little. Dow and VAY eked out new short-term highs with VAY to new all-time high by inches, but S&P and NASDAQ Composite failed.
  • Trading volume rose 1.2% Monday as compared to last Friday’s levels.
  • Short-term trend in S&P 500 remains positive and index must sell below lower edge of 10-Day Price Channel (1438.25 through Tuesday) to suggest Minor Cycle negative. Intermediate Cycle remains positive until lower edge of 10-Week Price Channel at 1388.08.
  • Daily MAAD was marginally negative Monday with 8 issues up and 11 down. Indicator continues to hold below December 20 short-term high in spite of higher S&P prices since then. Short-term negative divergence persists. Daily MAAD Ratio was last toward “Overbought” at 1.54.
  • Daily CPFL was positive Monday by 2.98 to 1 and reached another new short-term high at best level since November lows. Daily CPFL Ratio is “Overbought” at 2.49.

Market Overview – What We Think:

  • S&P’s move to best level since November 16 low (1343.35) last week and highest closing level since December 2007 is encouraging, but Cumulative Volume (CV) in bellwether has failed to overcome equivalent September 14 intraday resistance. As a consequence, note of caution is still warranted.
  • Fact that short-term trend remains positive without indicator confirmation on upside is an ongoing hint strength since November lows is suspicious, let alone on larger cycles that continue to lack indicator underpinnings.
  • Lingering weakness in MAAD, CPFL, Cumulative Volume, and Momentum, are continuing suggestion market may be on borrowed time.

volume 

emini, volume

Index Daily / Weekly / Monthly Stops Weekly Monthly
 

1/14

1/15

1/16

1/17

1/18

1/18

1/31

S&P 500 Index

SELL 1433.63

SELL 1438.25

SELL 1443.34

SELL 1448.54

SELL 1454.12

SELL 1388.08

SELL 1310.68

Dow Jones Industrials

SELL 13178.54

SELL 13208.47

SELL 13241.84

SELL 13281.24

SELL 13325.57

SELL 12864.44

SELL 12445.73

NASDAQ Composite

SELL 3041.15

SELL 3051.41

SELL 3063.79

SELL 3074.95

SELL 3086.86

SELL 2928.00

SELL 2809.46

Value Line Index

SELL 3186.77

SELL 3200.79

SELL 3216.53

SELL 3231.02

SELL 3244.64

SELL 2993.31

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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