Major stock indexes diverge relative to new highs

MAAD & CPFL Review

 

Market Snapshot for session ending 4-2-13
 

Last

Day Change

%Change

S&P 500 Index

1570.25

+8.08

+.52%

Dow Jones Industrials

14662.01

+89.16

+.61%

NASDAQ Composite

3254.86

+15.68

+.48%

Value Line Arithmetic Index

3504.91

-7.37

-.21%

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 closed generally higher Tuesday with only Value Line index finishing in negative column. S&P 500 and Dow Jones 30 ended at new all time closing highs. NASDAQ did not.
  • All cycles remain positive, but “Overbought.”
  • Market Volume was 10% higher compared to Monday’s levels.
  • S&P 500 needs to sell below lower edge of 10-Day Price Channel (1547.89 through Wednesday) to suggest Minor Cycle Negative. Intermediate Cycle in S&P 500 remains positive until 1485.30 through April 5.
  • Daily MAAD gained a bit on Tuesday (12 to 5), but remains below cumulative short to intermediate high made March 11. Daily MAAD Ratio was “Neutral” at 1.07.
  • Daily CPFL remained below new short to intermediate high Tuesday made March 27. Daily MAAD Ratio was “Neutral” at .97.
  • 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:

  • Variance in pricing between S&P and Dow 30 and NASDAQ Composite and VAY to extent 500 and 30 made new highs Tuesday while COMPX and VAY did not, produced small crack in surface of short-term advance put in effect after February 26 lows.
  • Admittedly, however, and despite “Overbought” near-term readings, such conditions can persist in otherwise positive market. Put another way, uptrend remains intact until proven otherwise. And until we see confirmed reversal of positive short-term trend to negative, any pullbacks will remain 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
 

4/1

4/2

4/3

4/4

4/5

4/5

4/30

S&P 500 Index

SELL 1546.37

SELL 1547.14

SELL 1547.89

SELL 1550.24

SELL 1550.24

SELL 1485.30

SELL 1349.76

Dow Jones Industrials

SELL 14414.46

SELL 14419.66

SELL 14422.73

SELL 14440.07

SELL 14440.07

SELL 13712.81

SELL 12653.67

NASDAQ Composite

SELL 3225.72

SELL 3227.89

SELL 3227.54

SELL 3232.01

SELL 3232.01

SELL 3115.64

SELL 2882.50

Value Line Index

SELL 3507.31

SELL 3508.92

SELL 3507.87

SELL 3511.93

SELL 3511.93

SELL 3335.08

SELL 2859.75

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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