Stock indexes higher, as market volatility suggests caution

MAAD & CPFL Review

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

 

Market Snapshot for session ending 3-14-13
 

Last

Day Change

%Change

S&P 500 Index

1563.23

+8.71

+.56%

Dow Jones Industrials

14539.14

+83.85

+.58%

NASDAQ Composite

3258.92

+13.81

+.43%

Value Line Arithmetic Index

3544.71

+28.31

+.80%

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:

  • Further strength in major indexes Thursday pushed all to new short and intermediate-term highs. Dow 30 and Value Line index closed at new all-time highs. S&P 500 was last 1.92 from equaling October 9, 2007 high (1565.15). NASDAQ Composite remains well below all-time high (5048.62 and intraday high at 5132.52) made March 10, 2000.
  • All cycles remain positive.
  • Market volume rose 7.6% Thursday.
  • S&P 500 must decline below lower edge of 10-Day Price Channel (1524.82 through Friday). Intermediate Cycle in S&P 500 becomes negative below lower edge of 10-Week Price Channel (1459.67 through March 15).
  • Daily MAAD rallied Thursday and was positive by 16 to 4, but indicator was last just below new short to intermediate-term high made March 11. Daily MAAD Ratio was “Overbought” at 1.97.
  • Daily CPFL, positive by 2.70 to 1 Thursday, rallied to new short to intermediate high and best level since August 15, 2011. But as measure of how CPFL has underperformed since then, S&P 500 was near 1200 on that date. Daily CPFL Ratio was moderately “Overbought” at 1.66.
  • Cumulative Volume (CV) in both S&P 500 and S&P Emini remains in synch with S&P 500 pricing in that both have moved higher since November lows, but long-term negative CV persists.

Market Overview – What We Think:

  • So long as short-term trend remains positive, intermediate uptrend begun after November 16 lows remains intact.
  • With volatility numbers approaching lowest levels since late spring and early summer of 2011, some concerns are surfacing as to how much longer this rally can persist since low levels of market volatility have coincided with significant market tops on at least Intermediate Cycle in past.
  • Long-term closing resistance (1565.15) in S&P 500 remains intact, but given upside momentum of market, nitpicking over confirmatory action when pricing and trends remain favorable could prove to be misplaced action.
  • Intermediate Cycle remains historically “Overbought,” but statistics may continue to lack prescience until short-term trend breaks to downside to justify “Overbought” warnings on intermediate trend. With only two brief short-term lulls, one in December and one recently, tone on Intermediate Cycle has been net positive 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
 

3/11

3/12

3/13

3/14

3/15

3/15

3/31

S&P 500 Index

SELL 1501.99

SELL 1506.08

SELL 1512.43

SELL 1518.89

SELL 1524.82

SELL 1459.67

SELL 1347.47

Dow Jones Industrials

SELL 13923.13

SELL 13963.12

SELL 14023.14

SELL 14084.96

SELL 14144.43

SELL 13468.82

SELL 12675.84

NASDAQ Composite

SELL 3136.94

SELL 3147.71

SELL 3161.56

SELL 3175.12

SELL 3187.98

SELL 3072.13

SELL 2890.17

Value Line Index

SELL 3374.06

SELL 3379.74

SELL 3393.11

SELL 3407.37

SELL 3422.49

SELL 3259.09

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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