Stock's minor spring rally is over; can intermediate trend hold?

MAAD & CPFL Review

 

Market Snapshot for session ending 4-18-13
 

Last

Day Change

%Change

S&P 500 Index

1541.61

-10.40

-.67%

Dow Jones Industrials

14537.14

-81.44

-.56%

NASDAQ Composite

3166.36

-38.31

-1.20%

Value Line Arithmetic Index

3408.23

-18.06

--.53%

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:

  • Follow-on weakness in major indexes Thursday pushed all bellwethers to new short-term lows and also brought Dow Jones 30 into fold of short-term negativity.
  • Market volume declined 8.7% relative to Wednesday’s levels.
  • S&P 500 must rally back above upper edge of 10-Day Price Channel (1580.00 through Friday) to suggest positive near-term reversal. Intermediate Cycle in S&P 500 remains positive until 1505.64 through April 19.
  • Short-term volatility measurements by moving higher have not only signaled an end to uptrend in effect since late February lows, but have also confirmed short-term negative.
  • Daily MAAD was negative Thursday by 5 to 15 and remains below new short to intermediate-term high reached April 11. Daily MAAD Ratio was “Neutral” at 1.00.
  • Daily CPFL was negative Thursday by 1.50 to 1 and remains below new short to intermediate high reached April 12. Daily CPFL Ratio was “Neutral” at 1.03.
  • Cumulative Volume (CV) remains more negative that S&P 500 prices, especially in S&P 500 Emini futures contract.

Market Overview – What We Think:

  • Short-term uptrend began after February 26 lows is over and larger Intermediate Cycle underway since November 16 lows could be in jeopardy.
  • Near-term trend continues to look vulnerable in face of short-term “Overbought” conditions, failed upside Momentum, and still bearish volatility.
  • Extent to which short-term trend weakens will determine staying power of larger Intermediate Cycle begun after November 16 lows (1343.35—S&P 500). Selling below lower edge of 10-Week Price Channel (1505.64—S&P 500) would almost certainly terminate that uptrend.

 

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

BUY 14754.63

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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