Stock market attempts leg higher, fails and retreats

MAAD & CPFL Review

 

Market Snapshot for session ending 3-25-13
 

Last

Day Change

%Change

S&P 500 Index

1551.69

-5.20

-.33%

Dow Jones Industrials

14447.75

-64.28

-.44%

NASDAQ Composite

3235.29

-9.69

-.30%

Value Line Arithmetic Index

3516.00

-8.46

-.24%

Minor Cycle (Short-term trend lasting days to a few weeks) Positive / Neutral

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:

  • Selling pressures left major indexes with net losses Monday, despite intraday highs in S&P 500, Dow 30, and NASDAQ Composite to best levels since March 2009 lows. Value Line index held below new all-time closing and intraday highs made March 20.
  • Market volume rose by 3% Monday.
  • Intermediate Cycle in S&P 500 remains positive until 1480.97 through March 29.
  • Daily MAAD moved lower Monday and remains below new short to intermediate-term high hit March 11. Daily MAAD Ratio was in “Oversold” territory at .75, but indicator is also negative, a possible symptom of first stages of trend reversal to negative.
  • Daily CPFL was negative by 1.17 to 1 Monday with Daily CPFL Ratio moderately “Overbought” at 1.65. 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:

  • With recent short-term highs remaining generally in effect to extent short-term trend has been unable to offer concerted strength on upside over past several days, near-term “Overbought” readings may increasingly affect market.
  • In addition, with short-term volatility readings now into danger zone, it wouldn’t take much selling pressure to terminate short-term trend uptrend begun after February 26 lows. If Minor Cycle negative does develop, focus could soon change to larger intermediate trend.
  • Nonetheless, until we see confirmed reversal of positive short-term trend, pullback from recent highs is merely preliminary and not definitive.
  • Negative Minor Cycle would likely lead to one of two options – stability and near-term low 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 Price Channel Stops (10-Bar MAs of Highs/Lows ) Weekly Monthly
 

3/25

3/26

3/27

3/28

3/29

3/29

3/31

S&P 500 Index

SELL 1548.19

SELL 1547.08

SELL 1547.50

SELL 1546.86

SELL 1546.61

SELL 1480.97

SELL 1347.47

Dow Jones Industrials

SELL 14399.63

SELL 14404.86

SELL 14418.87

SELL 14415.95

SELL 14418.45

SELL 13656.60

SELL 12675.84

NASDAQ Composite

SELL 3230.37

SELL 3226.53

SELL 3229.05

SELL 3226.56

SELL 3226.93

SELL 3109.83

SELL 2890.17

Value Line Index

SELL 3498.43

SELL 3499.60

SELL 3503.46

SELL 3505.61

SELL 3508.16

SELL 3321.64

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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