Stock market rebounds Tuesday, but volume shrinks

MAAD & CPFL Review

 

Market Snapshot for session ending 4-16-13
 

Last

Day Change

%Change

S&P 500 Index

1574.57

+22.21

+1.43%

Dow Jones Industrials

14756.78

+157.57

+1.08%

NASDAQ Composite

3264.62

+48.13

+1.50%

Value Line Arithmetic Index

3484.94

+52.40

+1.53%

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

Intermediate Cycle* (Medium trend lasting weeks to several months) Positive / Neutral

Major Cycle* (Long-term trend lasting several months to years) Positive

* Cycle status is based on S&P 500.

Market Overview – What We Know:

  • Modest rebound Tuesday allowed major indexes to recover some of losses sustained in Monday’s sharp decline.
  • Market volume, however, declined more than 20% during Tuesday’s bounce.
  • To suggest new short-term negative. S&P 500 must sell below lower edge of 10-Day Price Channel (1555.68 through Wednesday). Intermediate Cycle in S&P 500 remains positive until 1505.64 through April 19.
  • Short-term volatility measurements fell back slightly Tuesday, but nonetheless remain in bearish territory.
  • Daily MAAD was positive Tuesday by 17 to 3 and remains below new short to intermediate-term high reached April 11. Daily MAAD Ratio was marginally “Overbought” at 1.28.
  • Daily CPFL was positive by 1.10 to 1 Tuesday after registering new short to intermediate high last Friday. Daily CPFL Ratio just above “Neutral” at 1.08.
  • Cumulative Volume (CV) moved sharply lower in S&P 500 and S&P Emini futures contract Monday with marginal recovery Tuesday.

Market Overview – What We Think:

  • Monday’s sharp losses in major indexes with lower volume rebound Tuesday in face of short-term “Overbought” conditions, failing upside Momentum, and bearish volatility has left near-term trend vulnerable.
  • Monday’s 3.29% loss in Value Line index that put VAY into short-term negative territory could be harbinger of potential negativity in other indexes.
  • To prove negative point, S&P 500, Dow Jones Industrials, and NASDAQ Composite must follow lead of VAY and confirm new negative on short-term trend.
  • Once short-term is negative in all indexes, staying power of larger Intermediate Cycle could become an issue.
  • But until short-term trend is decidedly in negative column and is positioned to threaten larger intermediate-term trend, all pullbacks must be regarded as temporary in larger Intermediate Cycle.

Index Price Channel Stops (10-Bar MAs of Highs/Lows ) Weekly Monthly
 

4/15

4/16

4/17

4/18

4/19

4/19

4/30

S&P 500 Index

SELL 1551.37

SELL 1552.96

SELL 1555.68

SELL 1561.28

SELL 1565.13

SELL 1505.64

SELL 1349.76

Dow Jones Industrials

SELL 14502.95

SELL 14522.61

SELL 14552.20

SELL 14598.02

SELL 14638.51

SELL 13933.03

SELL 12653.67

NASDAQ Composite

SELL 3211.24

SELL 3210.34

SELL 3215.18

SELL 3227.53

SELL 3235.74

SELL 3150.40

SELL 2882.50

Value Line Index

SELL 3469.49

BUY 3505.65

BUY 3512.45

BUY 3522.75

BUY 3530.41

SELL 3384.79

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.

Next page: Indicator review

Page 1 of 2 >>
Comments
comments powered by Disqus
Check out Futures Magazine - Polls on LockerDome on LockerDome