Stocks' short-term negative tone gains momentum with selling

MAAD & CPFL Review

 

Market Snapshot for session ending 4-17-13
 

Last

Day Change

%Change

S&P 500 Index

1552.01

-22.55

-1.43%

Dow Jones Industrials

14618.59

-138.19

-.94%

NASDAQ Composite

3204.67

-59.95

-1.84%

Value Line Arithmetic Index

3426.29

-58.64

-1.68%

Minor Cycle* (Short-term trend lasting days to a few weeks) 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:

  • More concerted selling developed in major indexes Wednesday following light volume rebound on Tuesday.
  • Market volume rose 21% Wednesday compared to Tuesday’s levels.
  • S&P 500 sank below short-term Price Channel “failsafe” sell point Wednesday to suggest new Minor Cycle negative. Index must rally back above upper edge of 10-Day Price Channel (1576.34 through Thursday) to suggest positive near-term reversal. Intermediate Cycle in S&P 500 remains positive until 1505.64 through April 19.
  • Short-term volatility moved higher Wednesday to underscore negative market action.
  • Daily MAAD was negative Wednesday with 2 issues higher and 18 lower and remains below new short to intermediate-term high reached April 11. Daily MAAD Ratio was marginally “Overbought” at 1.25.
  • Daily CPFL ran counter to market decline Wednesday and was positive by 1.04 to 1 after registering new short to intermediate high last Friday. Daily CPFL Ratio was last just above “Neutral” at 1.13.
  • Cumulative Volume (CV) remains more negative that S&P 500 prices, especially in S&P 500 Emini futures contract.

Market Overview – What We Think:

  • Odds are increasing that short-term uptrend began after February 26 short-term lows is over and that larger Intermediate Cycle underway since November 16 lows could also be in end game.
  • Near-term trend continues to look vulnerable in face of short-term “Overbought” conditions, failing upside Momentum, and still bearish volatility.
  • Dow Jones Industrial Average has yet to get in step with S&P 500, NASDAQ Composite, and Value Line index to extent it has also signaled near-term negative, but Dow’s “reluctance” may soon be eliminated and all indexes could be short-term negative.
  • As short-term weakness continues, staying power of larger Intermediate Cycle could become an issue.

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

BUY 1576.34

BUY 1580.00

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

BUY 3260.75

BUY 3267.70

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.

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