Stock market rebounds on low volume; negative trend intact

MAAD & CPFL Review

 

Market Snapshot for session ending 4-22-13
 

Last

Day Change

%Change

S&P 500 Index

1562.50

+7.25

+.47%

Dow Jones Industrials

14567.17

+19.66

+.14%

NASDAQ Composite

3233.55

+27.49

+.86%

Value Line Arithmetic Index

3455.49

+11.44

+.33%

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:

  • Major indexes rebounded marginally Monday.
  • Trading volume decreased 13.1% compared to last Friday.
  • Short-term trend remains negative while larger Intermediate and Major Cycles are still positive.
  • S&P 500 must rally back above upper edge of 10-Day Price Channel (1582.07 through Tuesday) to suggest positive near-term reversal. Intermediate Cycle in S&P 500 remains positive until 1513.68 through April 26.
  • Short-term volatility measurements based on Daily Cycle remain bearish. Volatility readings for intraday 15 and 60 minute cycles are also bearish.
  • Daily MAAD was positive Monday by 14 to 5, but remains below new short to intermediate-term high reached April 11. Daily MAAD Ratio was “Neutral” at 1.02.
  • Daily CPFL was negative Monday by 1.50 to 1 and remains below new short to intermediate high reached April 12. Daily CPFL Ratio was toward “Neutral” at 1.11.
  • Cumulative Volume (CV) remains more negative that S&P 500 prices, especially in S&P 500 Emini futures contract.

Market Overview – What We Think:

  • Monday’s marginal rebound notwithstanding, short-term trend remains negative in all of major indexes and odds remain good further Minor Cycle selling could develop in sessions just ahead.
  • How Minor Cycle negative plays out will determine staying power of larger Intermediate Cycle that has been underway since November 16. That cycle is “Overbought” and vulnerable and historically mature.
  • With intraday volatility now bearish on 15 and 60 minute cycles within context of still negative Daily Cycle, we suspect rebound begun last Thursday could be toward termination point. Best we could see would be some further rebounding toward measured move target of 1572—S&P 500, then a resumption of short-term negative.

 

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

4/22

4/23

4/24

4/25

4/26

4/26

4/30

S&P 500 Index

BUY 1582.43

BUY 1582.07

BUY 1581.54

BUY 1577.28

BUY 1573.44

SELL 1513.68

SELL 1349.76

Dow Jones Industrials

BUY 14782.57

BUY 14787.00

BUY 14789.13

BUY 14770.56

BUY 14733.98

SELL 14038.80

SELL 12653.67

NASDAQ Composite

BUY 3271.91

BUY 3272.63

BUY 3268.14

BUY 3259.71

BUY 3250.98

SELL 3163.27

SELL 2882.50

Value Line Index

BUY 3535.13

BUY 3528.46

BUY 3522.30

BUY 3507.84

BUY 3495.71

SELL 3409.09

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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