Breakdown resistance continues to stall S&P 500 on upside

MAAD & CPFL Review

 

Market Snapshot for session ending 6-10-13
 

Last

Day Change

%Change

S&P 500 Index

1642.81

-.57

-.03%

Dow Jones Industrials

15238.59

-9.53

-.06%

NASDAQ Composite

3473.76

+4.55

+.13%

Value Line Arithmetic Index

3742.45

+10.94

+.29%

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:

  • Major indexes closed mixed Monday with S&P 500 and Dow 30 down fractions with NASDAQ Composite and Value Line index up a bit.
  • Market volume was off 9.8% compared to last Friday.
  • Short-term Trading Oscillators are “Oversold,” but Intermediate and Major Cycles remain “Overbought.”
  • Our volatility indicator based on VIX data remains negative, but only marginally so.
  • To confirm reversal to positive on Minor Cycle, S&P 500 must rally above upper edge of 10-Day Price Channel (1655.63 through Tuesday). Intermediate Cycle in S&P 500 remains positive until 1561.97 through June 14.
  • Daily MAAD was positive by 11 to 8 Monday and Daily MAAD Ratio remains near “Neutral” at 1.07.
  • Daily CPFL was positive by 1.43 to 1 Monday and indicator remains below new short to intermediate-term high made May 30. CPFL Ratio was last “Neutral” at 1.02

Market Overview – What We Think:

  • Following May 31 breakdown in pricing near 1640 in S&P 500 Emini, pricing has come back to gradually upsloping trendline twice (June 4 and June 10), and has contained buying in both instances.
  • That “return action” from May 31 low (1596.50—S&P 500 Emini) could satisfy requirements of a reflex bounce before resumption of Minor Cycle negative in face of larger Intermediate Cycle that remains “Overbought” and vulnerable.
  • Since May 22 intraday S&P 500 high (1687.18) and potential Key Reversal Day remains intact, nothing but new highs would eliminate KRD while re-asserting Intermediate Cycle begun last November and Major Cycle begun in March 2009.
  • If renewed selling develops and last Thursday’s intraday S&P low is fractured, intermediate Cycle in effect since November 16 would likely be over.
  • Reversal of our VIX-based volatility indicator to negative in conjunction with price negativity confirms unfavorable shift in market psychology on short to intermediate-term.

 

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

S&P 500 Index

BUY 1658.67

BUY 1655.63

BUY 1649.94

BUY 1643.86

BUY 1642.91

SELL 1561.97

SELL 1374.74

Dow Jones Industrials

BUY 15381.96

BUY 15364.86

BUY 15324.53

BUY 15265.77

BUY 15255.22

SELL 14564.10

SELL 12785.71

NASDAQ Composite

BUY 3489.75

BUY 3487.62

BUY 3479.31

BUY 3468.19

BUY 3467.70

SELL 3240.52

SELL 2932.03

Value Line Index

BUY 3761.80

BUY 3757.90

BUY 3747.71

BUY 3735.98

BUY 3734.35

SELL 3483.50

SELL 2949.32

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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