Market mixed Tuesday, but still gives some ground

MAAD & CPFL Review

 

Market Snapshot for session ending 3-19-13
 

Last

Day Change

%Change

S&P 500 Index

1548.34

-3.76

-.24%

Dow Jones Industrials

14455.82

+3.76

+.03%

NASDAQ Composite

3229.09

-8.49

-.26%

Value Line Arithmetic Index

3512.06

-10.75

-.31%

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:

  • Mixed closings with a slight downward tone characterized trading in major indexes Tuesday. Dow Jones 30 was up fractions, but S&P 500, NASDAQ Composite, and Value Line index were off slightly.
  • None of recent new highs were challenged Tuesday (1563.62—S&P 500).
  • Market volume was higher by nearly 10% compared to Monday’s activity.
  • S&P 500 must decline below lower edge of 10-Day Price Channel (1539.83 through Wednesday) to suggest end to short-term advance begun after February 26 intraday lows (1485.01—S&P 500).
  • Daily MAAD was marginally negative Tuesday with 8 issues higher and 12 lower. Indicator remains below new short to intermediate-term high made March 11. Daily MAAD Ratio was last just above “Neutral” at 1.06.
  • Daily CPFL rallied to another short to intermediate high Tuesday on marginally positive data (1.05 to 1). Daily CPFL Ratio was moderately “Overbought” at 1.45. Indicator remains well below major resistance created February 25, 2011.
  • 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:

  • Further selling pressures on Minor Cycle have damaged uptrend in effect since February 26 short-term lows, but until we see confirmed reversal of short-term trend, pullback from last Friday’s intraday highs (1563.62—S&P 500) is merely preliminary and is not definitive.
  • If, however, short-term trend succumbs to more selling in face of near-term “Overbought” conditions and breaking of 10-Day Price Channel support points on increasing volatility, a potentially bearish sign, THEN we would have to take a more serious look at next larger Intermediate Cycle and its ability to withstand selling pressures.
  • Negative Minor Cycle would allow for one of two options – stability before turning intermediate trend negative with subsequent resumption of uptrend, or more negativity and reversal of Intermediate Cycle in effect since November 16 lows (1343.35—S&P 500).
  • With longer-term volatility readings 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 persistent low volatility has coincided with significant market tops over past several years.
  • But 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
 

3/18

3/19

3/20

3/21

3/22

3/22

3/31

S&P 500 Index

SELL 1530.82

SELL 1535.90

SELL 1539.83

SELL 1543.93

SELL 1547.52

SELL 1472.85

SELL 1347.47

Dow Jones Industrials

SELL 14203.71

SELL 14259.31

SELL 14303.42

SELL 14345.81

SELL 14383.59

SELL 13578.22

SELL 12675.84

NASDAQ Composite

SELL 3200.28

SELL 3209.77

SELL 3217.11

SELL 3226.15

SELL 3232.16

SELL 3098.79

SELL 2890.17

Value Line Index

SELL 3439.24

SELL 3454.04

SELL 3466.27

SELL 3479.52

SELL 3493.34

SELL 3297.86

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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