Stock indexes flirt with recent highs, as near-term waffles

MAAD & CPFL Review

 

Market Snapshot for session ending 3-26-13
 

Last

Day Change

%Change

S&P 500 Index

1563.77

+12.08

+.78%

Dow Jones Industrials

14559.65

+111.90

+.77%

NASDAQ Composite

3252.48

+17.18

+.53%

Value Line Arithmetic Index

3533.78

+17.78

+.51%

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:

  • Round of buying came into market Tuesday and all of major indexes ended on plus side, but none was able to reach new closing high.
  • Market volume declined by 13.6%.
  • To suggest Minor Cycle negative S&P 500 needs to sell below lower edge of 10-Day Price Channel (1547.50 through Wednesday). Intermediate Cycle in S&P 500 remains positive until 1480.97 through March 29.
  • Daily MAAD rallied Tuesday, but on cumulative basis remains below new short to intermediate-term high made March 11. Daily MAAD Ratio was just below “Neutral” at .93.
  • Daily CPFL moved to new short to intermediate high yesterday on positive ratio of 2.04 to 1. Indicator remains moderately “Overbought” at 1.59 and, on cumulative basis, continues to hold well below major resistance made February 25, 2011.
  • Cumulative Volume (CV) in both S&P 500 and S&P Emini has remained in synch with S&P 500 pricing since November intermediate-term lows, long-term negative divergences persist.

Market Overview – What We Think:

  • So long as short-term “backing and filling” continues, and so long as buyers step in each time market falls back marginally, we cannot rule out possibility new highs in major indexes will follow, given fact all cycles remain positive.
  • Near-term readings remain “Overbought,” but such conditions can persist in otherwise strong market. Put another way, uptrend since beginning of near-term advance back on February 26 remains intact until proven otherwise. And until we see confirmed reversal of positive short-term trend to negative, any pullbacks remain merely preliminary and not definitive.
  • But with short-term volatility readings now into danger zone, it wouldn’t take much selling pressure to terminate Minor Cycle uptrend. If new negative does develop, focus could then be re-directed toward larger intermediate trend.

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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