Key stock market indicator hits another high as pricing tags along

MAAD & CPFL Review

 

Market Snapshot for session ending 09-05-13
 

Last

Day Change

%Change

S&P 500 Index

1655.08

+2.00

+.12%

Dow Jones Industrials

14937.48

+6.60

+.04%

NASDAQ Composite

3658.78

+9.74

+.27%

Russell 2000 Index

1028.69

+3.11

+.30%

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

Intermediate Cycle* (Medium trend lasting weeks to several months) 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 posted small gains Thursday. NYSE a/d data was negative by 1.1 to 1, but NYSE up/down volume was ahead by 1.58 to 1. NASDAQ Composite remains strongest of majors and was last less than 1% from bettering its August 5 new closing high (3692.95).
  • Market volume declined 12.6%.
  • Short-term trend was slightly positive to extent S&P closed just above upper edge of 10-Day Price Channel Thursday (1654.62). Intermediate Cycle, as measured by lower edge of 10-Week Price Channel (1638.33 through September 6) remains tentative.
  • Our VIX-based short-term volatility indicator rose to 30% Thursday from Wednesday’s 23% to suggest slightly more positive tone to market. At June 24 Minor Cycle low VBVI was at 22%.
  • Daily MAAD rallied to another new high Thursday with 18 issues positive and 2 negative. Daily MAAD Ratio was “Overbought” at 1.81.
  • Daily CPFL was positive Thursday by 1.38 to 1 after sinking to new short-term low Wednesday. Indicator was last right at uptrend line stretching back to October 2011. Daily CPFL Ratio remains “Oversold” at .63.

Market Overview – What We Think:

  • New high made by Daily MAAD Thursday makes market environment more interesting considering fact NYSE a/d and NYSE up/down volume lines remain weak while continuing to hold well below August price highs that neither confirmed.
  • While MAAD includes NASDAQ Composite transactions, strength of indicator is not merely reflection of COMPX strength compared to SPX and Dow 30. Could be that MAAD is more accurately reflecting Smart Money tendencies.
  • Extent to which any short-term advance plays out relative to August highs (1709.67—S&P 500) will determine staying power of larger Intermediate Cycle in effect since last November 16.
  • A number of things are weighing in favor of higher prices on Minor Cycle including failure of short-term Momentum to make new lows, “Oversold” price-based short-term oscillators, our VIX-based volatility indicator turning higher from near-term zone of opportunity, and bullishness in MAAD.

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

9/2

9/3

9/4

9/5

9/6

9/6

9/30

S&P 500 Index

HOL

BUY 1665.17

BUY 1661.92

BUY 1657.40

BUY 1654.82

SELL 1638.33

SELL 1448.73

Dow Jones Industrials

HOL

BUY 14933.35

BUY 14956.74

BUY 14987.47

BUY 14974.28

BUY 15451.27

SELL 13465.21

NASDAQ Composite

HOL

BUY 3647.50

SELL 3610.49

SELL 3604.40

SELL 3601.44

SELL 3485.26

SELL 3044.23

Russell 2000 Index

HOL

BUY 1036.39

BUY 1036.04

BUY 1033.12

BUY 1032.38

SELL 1005.64

SELL 851.79

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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