Stock market trend still positive although indicators waning

Weekly Report: MAAD and CPFL Indicator Analysis

Daily S & P 500 Emini Futures contract with Cumulative Volume (CV)

Weekly S & P 500 Emini Futures contract with Cumulative Volume (CV)

Is it possible this market could continue higher for months? Sure. It’s the stock market and what we’re attempting to measure is market psychology. When the majority of players is fully invested and believe they are experiencing a new stock market nirvana, the market will make a top, roll over, and head lower. That’s always been the way and it will be no exception this time around either.

Index Daily / Weekly / Monthly Stops Weekly Monthly

S&P 500 Index

SELL 1496.12

SELL 1496.44

SELL 1498.13

SELL 1498.41

SELL 1500.52

SELL 1406.37

SELL 1330.62

Dow Jones Industrials

SELL 13851.86

SELL 13863.41

SELL 13876.31

SELL 13874.43

SELL 13887.93

SELL 12981.90

SELL 12570.95

NASDAQ Composite

SELL 3138.29

SELL 3138.30

SELL 3141.77

SELL 3141.21

SELL 3147.93

SELL 2968.62

SELL 2862.45

Value Line Index

SELL 3366.76

SELL 3368.22

SELL 3372.18

SELL 3374.65

SELL 3380.68

SELL 3088.73

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.

On the near term we know that all cycle are still positive. But we also know that these “Overbought” conditions and upside Momentum failures will not last indefinitely. First the short-term trend will reverse to negative, then the intermediate, and finally the major trend. When all are in synch on the downside we will be able to determine just how prudent it was to continue holding equities after the May 2011 indicator highs and if the risk was eventually worth the reward.

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