Stock market higher on lower volume

MAAD & CPFL Review

 

Market Snapshot for session ending 3-20-13
 

Last

Day Change

%Change

S&P 500 Index

1558.71

+10.37

+.67%

Dow Jones Industrials

14511.73

+55.90

+.39%

NASDAQ Composite

3254.18

+25.09

+.78%

Value Line Arithmetic Index

3545.85

+33.78

+.96%

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:

  • Major indexes posted marginal gains Wednesday and Value Line index rallied to new all-time high. S&P 500, Dow 30, and NASDAQ Composite did not, however.
  • Market volume shrank by nearly 8%.
  • To suggest Minor Cycle negative, S&P 500 must decline below lower edge of 10-Day Price Channel (1543.93 through Thursday). Such action would likely end short-term uptrend begun after February 26 intraday lows (1485.01—S&P 500). Intermediate Cycle remains positive until 1472.85 (through Thursday).
  • Daily MAAD was positive Wednesday with 16 issues higher and 3 lower, but indicator remains below new short to intermediate-term high made March 11. Daily MAAD Ratio was toward “Neutral” at 1.10.
  • Daily CPFL was negative by 1.36 to 1 Wednesday with Daily CPFL Ratio moderately “Overbought” at 1.89. 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:

  • Modest buying Wednesday was proof yet again short-term trend begun after February 26 lows (1485.01—S&P 500) remains viable. with new closing high in VAY, we cannot preclude another rally attempt that could carry remaining indexes to new highs also.
  • Another reality is that it would not take much selling pressure to terminate short-term trend that remains “Overbought” in a low volatility environment, a potentially bearish scenario. As a consequence, until we see confirmed reversal of positive short-term trend, pullback from last Friday’s intraday highs (1563.62—S&P 500) is merely preliminary and not definitive.
  • If, however, short-term trend succumbs to more selling in face of Minor Cycle “Overbought” conditions and breaking of lower edges of10-Day Price Channel support points, 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).

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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