Stock market inches higher; technical indicator hits 3-year high

MAAD & CPFL Review

Stock market chart, technical analysis Stock market chart, technical analysis

 

Market Snapshot for session ending 3-7-13
 

Last

Day Change

%Change

S&P 500 Index

1544.26

+2.80

+.18%

Dow Jones Industrials

14329.49

+33.24

+.23%

NASDAQ Composite

3232.08

+9.72

+.30%

Value Line Arithmetic Index

3474.71

+13.82

+.40%

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:

  • S&P 500, Dow Jones Industrial Average, and NASDAQ Composite rallied to new short to intermediate highs Thursday. Dow 30 closed at new all-time high, but Dow 20 for second day in row lost ground. Value Line index remains below February 19 all-time closing high, but only by 2.23 points.
  • Market volume declined 2.7%.
  • Short-term trend was last positive in all indexes. To suggest short-term reversal to negative S&P 500 must decline below lower edge of 10-Day Price Channel (1500.28 through Friday). Intermediate Cycle in S&P 500 turns negative below lower edge of 10-Week Price Channel (1447.88 through March 8).
  • Daily MAAD rallied to new short- and intermediate-term high Thursday and was last at highest level since March 2009 lows. Indicator was positive by 14 to 6 and Daily MAAD Ratio was “Overbought” at 2.03.
  • Daily CPFL was negative by 1.31 to 1 Thursday and indicator has yet to overcome short-term high created February 19. Daily CPFL Ratio was last toward ”Neutral” at .99.
  • Cumulative Volume (CV) in both S&P 500 and S&P Emini eked out new short to intermediate highs Thursday, but on relative basis remains weak on longer-term.

Market Overview – What We Think:

  • Market gains have re-asserted intermediate uptrend begun after November 16 lows and bias remains in favor of bulls until short-term trend inevitably weakens to suggest possible threat to intermediate uptrend.
  • While Dow 30 and 20 underscored Dow Theory with new highs, and while S&P moved to best levels since November lows, latter has yet to overcome October 9, 2007 closing high at 1565.15. Admittedly, however, given upside momentum of market, nitpicking over confirmatory action when all trends remain positive could prove to be pointless on short term.
  • While Intermediate Cycle remains historically “Overbought,” those statistics may continue to lack prescience until short-term trend breaks to downside with conviction to justify intermediate “Overbought” warnings. With only two brief short-term lulls, one in December and one recently, negative tone on Intermediate Cycle has been decidedly lacking since November 16.
  • As a consequence, until larger cycles reverse to negative, all Minor Cycle pullbacks must be regarded as just that – short-term corrections within context of larger cycle positives.

Index Daily / Weekly / Monthly Stops Weekly Monthly
 

3/4

3/5

3/6

3/7

3/8

3/8

3/31

S&P 500 Index

BUY 1522.69

SELL 1500.99

SELL 1498.91

SELL 1500.76

SELL 1500.28

SELL 1447.88

SELL 1347.47

Dow Jones Industrials

SELL 13885.09

SELL 13862.58

SELL 13860.28

SELL 13890.67

SELL 13898.61

SELL 13349.57

SELL 12675.84

NASDAQ Composite

BUY 3188.72

BUY 3178.18

SELL 3137.14

SELL 3138.56

SELL 3134.96

SELL 3051.31

SELL 2890.17

Value Line Index

BUY 3442.39

BUY 3428.62

SELL 3379.01

SELL 3379.82

SELL 3374.22

SELL 3221.65

SELL 2852.92

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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