S&P 500 maintains trend toward key price level

MAAD & CPFL Analysis

Stock market chart Stock market chart

 

Market Snapshot for session ending 2-6-13
 

Last

Day Change

%Change

S&P 500 Index

1511.29

+15.58

+1.04%

Dow Jones Industrials

13979.30

+99.21

+.71%

NASDAQ Composite

3171.58

+40.41

+1.29%

Value Line Arithmetic Index

3400.08

+30.79

+.91%

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

Market Overview – What We Know:

  • All four major indexes we cover rallied modestly from Monday’s Losses, but none fully retraced all of negativity. While S&P 500 eked out new short to intermediate high via intraday action, S&P’s closing level was not a new closing high.
  • Trading volume rose 10% compared to Mondays levels.
  • All trends remain positive on Minor, Intermediate and Major Cycles, but all are also historically “Overbought.”
  • S&P 500 must decline below lower edge of 10-Day Price Channel at 1492.17 through Wednesday to signal new negative short-term trend. Intermediate trend turns negative below 1395.00 through Friday.
  • Daily MAAD recovered all of Monday’s losses Tuesday and scratched out a slightly higher and new short-term high and moved to best level since December 28 short-term low. Seventeen issues were positive with 3 negative. Daily MAAD Ratio was marginally “Overbought” at 1.24.
  • Daily CPFL was positive Monday and moved to new short to intermediate-term high. Daily CPFL Ratio was moderately “Overbought” at 1.70.
  • Cumulative Volume (CV) in S&P Emini, Dow 30, and NASDAQ Composite continues to under perform pricing.

Market Overview – What We Think:

  • Trend under way since November lows in all of major indexes may be toward endgame given “Overbought” conditions and simple fact prices cannot continue higher indefinitely without some retrenching.
  • Monday’s reversal of last Friday’s gains to new short-term highs is suggestion sellers remain just above current bids near major resistance levels. 
  • Short-term measured move target toward 1510 has been “teased” over past six sessions and has held to suggest Minor Cycle could be near termination phase and upside goals.
  • 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 ending.
  • Longer-term lingering weakness in MAAD, CPFL, Cumulative Volume, and Momentum, is an indication market could be on borrowed time. Nothing but new highs by all our key indicators, an unlikely event, would erase negative divergence.

volume 

volume

Index Daily / Weekly / Monthly Stops         Weekly Monthly
 

2/4

2/5

2/6

2/7

2/8

2/8

2/28

S&P 500 Index

SELL 1485.71

SELL 1489.05

SELL 1492.17

SELL 1494.02

SELL 1495.59

SELL 1395.00

SELL 1330.62

Dow Jones Industrials

SELL 13702.83

SELL 13749.07

SELL 13790.75

SELL 13817.61

SELL 13837.35

SELL 12903.12

SELL 12570.95

NASDAQ Composite

SELL 3130.09

SELL 3132.01

SELL 3133.89

SELL 3135.18

SELL 3137.22

SELL 2941.35

SELL 2862.45

Value Line Index

SELL 3339.86

SELL 3349.75

SELL 3355.06

SELL 3358.91

SELL 3364.69

SELL 3411.65

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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