S&P rallies at support set by uptrend from November

MAAD & CPFL Review

 

Market Snapshot for session ending 6-13-13
 

Last

Day Change

%Change

S&P 500 Index

1636.36

+23.84

+1.48%

Dow Jones Industrials

15176.08

+180.84

+1.21%

NASDAQ Composite

3445.36

+44.93

+1.32%

Value Line Arithmetic Index

3732.35

+62.73

+1.71%

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

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:

  • Finding support at uptrend line stretching back to November 16 intermediate-term low (1343.35), S&P 500 rallied sharply Thursday. All other major indexes also gained on day.
  • Market volume was rose just over 3%.
  • Despite strength, however, short-term trend remains negative until S&P rallies above upper edge of 10-Day Price Channel (1642.91 through Friday). Intermediate Cycle remains positive until 1561.97.
  • Our short-term volatility indicator based on VIX data is negative.
  • Daily MAAD was positive Thursday by 15 to 5 and Daily MAAD Ratio continues to hold in “Oversold” territory (.74).
  • Daily CPFL was positive by 2 to 1 Thursday and Daily CPFL Ratio was “Neutral” at .99.

Market Overview – What We Think:

  • Rebound Thursday from intermediate-term trend line in effect since last November’s lows gave some hope to bullish cause. Unfortunately, nothing but strength back above May 22 intraday high in S&P 500 (1687.18) will re-assert intermediate uptrend and long-term advance begun in March 2009.
  • Tilting in favor of bullish resolution, short-term “Oversold” conditions remain in effect. But selling below June 6 S&P intraday low at 1598.23 would suggest more weakness could follow.
  • So long as May 22 intraday S&P 500 high (1687.18), and potential Key Reversal Day, remains intact, nothing but new highs would re-assert Intermediate Cycle begun last November and Major Cycle begun in March 2009.
  • Fact that our VIX-based volatility indicator did not make new lows as prices made new highs is suggestive of fact rally into May 22 highs was suspect and in possible end game. Reversal of 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
 

6/10

6/11

6/12

6/13

6/14

6/14

6/30

S&P 500 Index

BUY1658.67

BUY1655.63

BUY1649.94

BUY1643.86

BUY1642.91

SELL1561.97

SELL1374.74

Dow Jones Industrials

BUY15381.96

BUY15364.86

BUY15324.53

BUY15265.77

BUY15255.22

SELL14564.10

SELL12785.71

NASDAQ Composite

BUY3489.75

BUY3487.62

BUY3479.31

BUY3468.19

BUY3467.70

SELL3240.52

SELL2932.03

Value Line Index

BUY3761.80

BUY3757.90

BUY3747.71

BUY3735.98

BUY3734.35

SELL3483.50

SELL2949.32

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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