Stock indexes dawdle Monday; S&P 500 just below target

MAAD & CPFL Analysis

Stock market chart Stock market chart

 

Market Snapshot for session ending 1-28-13
 

Last

Day Change

%Change

S&P 500 Index

1500.18

-2.78

-.18%

Dow Jones Industrials

13881.93

-14.05

-.10%

NASDAQ Composite

3154.29

+4.58

+.15%

Value Line Arithmetic Index

3389.36

+.75

+.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:

  • Little change was registered in major indexes Monday when S&P 500 and Dow 30 registered small losses while NASDAQ Composite and Value Line index were up a little.
  • Trading volume was little changed compared to Friday’s levels.
  • All cycles, including Minor, Intermediate, and Major, remain positive. S&P 500 needs to sell below lower edge of 10-Day Price Channel at 1470.52 through Tuesday. Intermediate trend turns negative below 1393.45 through Friday.
  • Daily MAAD was flat again Monday with 10 issues higher and 9 low. One was unchanged. Daily MAAD Ratio was unchanged and marginally “Overbought” at 1.18.
  • Daily CPFL hit another new short-term high Monday and recorded its best levels since August 17, 2011. Daily CPFL Ratio was moderately “Overbought” at 1.89.
  • Cumulative Volume (CV) eked out new short to intermediate high last Thursday in S&P 500, but action was not confirmed by S&P Emini, Dow 30, or NASDAQ Composite.

Market Overview – What We Think:

  • Short-term trend in all of major indexes has begun to look overdone on upside, given “Overbought” conditions, and simple fact prices cannot continue higher indefinitely without some retrenching.
  • If move since November lows turns out to be A-B-C rally with “B” leg pullback from December 19 to January 2, “C” leg rally could be in termination phase toward 1510.
  • Confirming movement in cash S&P CV to new short-term high is positive, but failure of CV In S&P Emini, Dow 30, and NASDAQ Composite on same cycle, means strength has been selective.
  • Suggestion lingers that rally since November lows has been fueled by weaker and weaker hands. Larger cycles have also lacked indicator confirmation since early 2011.
  • Longer-term 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, an unlikely event, would erase negative tone.

 cv

cv

Index Daily / Weekly / Monthly Stops Weekly Monthly
 

1/28

1/29

1/30

1/31

2/1

2/1

2/28

S&P 500 Index

SELL 1467.39

SELL 1470.52

SELL 1474.79

SELL 1478.29

SELL 1482.17

SELL 1393.45

SELL 1330.62

Dow Jones Industrials

SELL 13465.24

SELL 13501.33

SELL 13548.19

SELL 13600.05

SELL 13552.08

SELL 12901.57

SELL 12570.95

NASDAQ Composite

SELL 3108.12

SELL 3111.70

SELL 3119.72

SELL 3121.81

SELL 3125.47

SELL 2936.97

SELL 2862.45

Value Line Index

SELL 3284.42

SELL 3293.98

SELL 3305.88

SELL 3316.66

SELL 3328.72

SELL 3030.39

SELL 2817.27

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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