Stock market tipped by recent weak market

MAAD & CPFL Review

 

Market Snapshot for session ending 5-1-13
 

Last

Day Change

%Change

S&P 500 Index

1582.70

-14.86

-.93%

Dow Jones Industrials

14700.95

-138.84

-.94%

NASDAQ Composite

3299.12

-29.66

-.89%

Value Line Arithmetic Index

3519.09

-59.97

-1.68%

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

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

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

* Cycle status is based on S&P 500.

Market Overview – What We Know:

  • Net selling characterized price action of major indexes Wednesday. Value Line index was biggest loser (-1.68%).
  • Market volume declined 7.5%.
  • All cycles remain positive, including Minor, Intermediate, and Major.
  • Selling below lower edge of 10-Day Price Channel (1558.94 through Thursday) in S&P 500 would suggest new short-term negative. Intermediate Cycle in S&P 500 remains positive until 1521.53 through May 3.
  • Daily MAAD pulled back from new short to intermediate-term high made Tuesday and best levels since last November 16 at intermediate lows. And also since March 2009. Indicator was negative by 6 to 14. Daily MAAD Ratio was moderately “Overbought” at 1.54.
  • Running contrary to market strength for second day in row, CPFL was positive Wednesday by 1.38 to 1, but remains below new short to intermediate high reached April 12. Daily CPFL Ratio was marginally “Overbought” at 1.22.
  • Cumulative Volume (CV) in S&P 500 and S&P 500 Emini continues to point out short-term negative disparity relative to pricing. CV remains weak and has only retraced about 50% of its losses since April 11 while pricing has been stronger.

Market Overview – What We Think:

  • Index pricing stepped up for a dose of reality Wednesday when price action got more in line with recent Cumulative Volume (CV) numbers. Failure of CV to confirm recent strength to new highs in S&P 500 and NASDAQ Composite made us wonder at staying power of rally begun after April18 lows (VAY reports no volume). There was also fact Dow 30 did not make new highs.
  • With short-term trend still positive, it remains to be seen in Wednesday’s downdraft was merely corrective in minor uptrend and if more new highs will follow since larger Intermediate Cycle remains positive.
  • But to give any rally validity, we would need to see Dow 30 also make new high (above 
  • April 18 intraday high at 14887.51 and old closing high at 14865.14 also made on April 18).
  • How Minor Cycle plays out will ultimately determine staying power of larger Intermediate Cycle that has been underway since November 16, a trend that is “Overbought” and historically mature.

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

4/29

4/30

5/1

5/2

5/3

5/3

5/31

S&P 500 Index

SELL 1550.59

SELL 1551.64

SELL 1555.07

SELL 1558.94

SELL 1562.69

SELL 1521.53

SELL 1360.47

Dow Jones Industrials

BUY 14704.73

SELL 14546.39

SELL 14559.23

SELL 14572.00

SELL 14615.9

SELL 14127.12

SELL 12701.94

NASDAQ Composite

SELL 3202.81

SELL 3207.22

SELL 3213.68

SELL 3224.30

SELL 3233.03

SELL 3176.91

SELL 2896.99

Value Line Index

SELL 3432.14

SELL 3432.35

SELL 3441.49

SELL 3455.99

SELL 3469.20

SELL 3430.97

SELL 2895.29

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

 

Comments
comments powered by Disqus