Market up on lower volume and weak technicals

MAAD, CPFL indicator review

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

 

Market Snapshot for session ending 1-22-13
 

Last

Day Change

%Change

S&P 500 Index

1492.56

+6.58

+.44%

Dow Jones Industrials

13712.21

+62.50

+.46%

NASDAQ Composite

3143.17

+8.46

+.27%

Value Line Arithmetic Index

3355.97

+23.44

+.70%

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 realized marginal gains Tuesday when S&P 500, Dow 30, and Value Line index all rallied to new short to intermediate-term highs. VAY rallied to new all-time high. Only NASDAQ Composite has yet to better September resistance level.
  • Trading volume declined by 14% compared to last Friday’s levels.
  • All cycles including Minor, Intermediate, and Major remain positive, but all are “Overbought” on Minor Cycle and moderately “Overbought” to “Overbought” on intermediate trend.
  • To suggest short-term negative, S&P must sink below lower edge of 10-Day Price Channel (1462.73 through Wednesday). Intermediate trend turns negative below (1388.08). And long-term trend below (1391.74).
  • Despite movement to new highs Tuesday, Daily MAAD was slightly positive with 11 issues up and 9 down, and remains only slightly above December 20 minor resistance. Daily MAAD Ratio was above “Neutral” at 1.14.
  • Daily CPFL was negative Tuesday by 1.02 to 1 and remains below September intermediate resistance. Daily CPFL Ratio is “Overbought” at 1.57.
  • Cumulative Volume (CV) in S&P 500 rallied to new short to intermediate high Tuesday, but action was not confirmed by CV in S&P Emini or Dow 30.

Market Overview – What We Think:

  • S&P’s move to best level Tuesday since November 16 low (1343.35) and highest closing level since December 2007 gives market more favorable tone along with strength to new all-time highs in Value Line index.
  • Thursday’s move by CV in cash S&P to new short-term high gave bulls a vote of confidence, but failure by S&P Emini and Dow 30, and ongoing lag by NASDAQ Composite continues to underscore fact market gains remain spotty.
  • Suggestion lingers that rally since November lows has been fueled by weaker hands than during previous rallies and continues to lack statistical underpinnings. Larger cycles have also lacked indicator confirmation since early 2011.
  • Lingering weakness in MAAD, CPFL, Cumulative Volume, and Momentum, are an indication market could be on borrowed time. Nothing but new highs by all our key indicators would erase that negative tone.

volume

volume

Index Daily / Weekly / Monthly Stops Weekly Monthly
 

1/21

1/22

1/23

1/24

1/25

1/25

1/31

S&P 500 Index

SELL 1458.17

SELL 1460.70

SELL 1462.73

SELL 1464.93

SELL 1467.39

SELL 1391.74

SELL 1310.68

Dow Jones Industrials

SELL 13364.87

SELL 13391.91

SELL 13412.96

SELL 13434.88

SELL 13465.23

SELL 12899.21

SELL 12445.73

NASDAQ Composite

SELL 3093.99

SELL 3096.53

SELL 3098.97

SELL 3104.45

SELL 3108.12

SELL 2933.93

SELL 2809.46

Value Line Index

SELL 3255.40

SELL 3262.11

SELL 3268.80

SELL 3276.07

SELL 3284.42

SELL 3012.55

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.

Next page: Indicator review

Comments
comments powered by Disqus