Nasdaq Composite, key indicator at new highs go solo

MAAD & CPFL Review

 

Market Snapshot for session ending 09-09-13
 

Last

Day Change

%Change

S&P 500 Index

1671.71

+16.54

+1.00%

Dow Jones Industrials

15063.12

+140.62

+.94%

NASDAQ Composite

3706.18

+46.17

+1.26%

Value Line Index

3929.75

+57.59

+1.49%

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

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:

  • Short-term improvement continued Monday with all of major indexes on plus side. NASDAQ Composite rallied to new high and best level since March 2009, but Cumulative Volume (CV) did not confirm strength in COMPX by also hitting new high. Biggest gainer on day was Value Line index, up 1.49%.
  • NYSE advance/decline stats were positive by 3.89 to 1 with NYSE up/down volume ahead by 7 to 1.
  • Market volume declined 4.6%.
  • To reverse short-term trend to negative, S&P 500 must sell below lower edge of 10-Day Price Channel (1635.63 through Tuesday). Intermediate Cycle, as measured by lower edge of 10-Week Price Channel (1649.34 through September 13) remains tentatively positive.
  • Our VIX-based short-term volatility indicator was last closing in on “Neutral” with reading of 41.8%. At June 24 Minor Cycle low VBVI was at 22%.
  • Daily MAAD rallied to new high Monday with 18 issues positive and 2 negative. Daily MAAD Ratio was moderately “Overbought” at 1.68.
  • Despite Monday’s strength, Daily CPFL was negative by 1.10, remains near long-term uptrend line stretching back to October 2011, with Daily CPFL Ratio deeply “Oversold” at .45.

Market Overview – What We Think:

  • With short-term trend now positive and with COMPX and MAAD at new highs, possibility remains other major indexes and broad market could also challenge early August highs. Problem remains with volume that seems to be lacking upside conviction.
  • Until or unless new highs are made by broad range of issues and indexes, we cannot rule out possibility strength since recent lows could ultimately prove to be merely “return action” rally into developing Intermediate Cycle high, COMPX and MAAD new highs notwithstanding.
  • But for moment, so long as short-term trend remains favorable, possibility remains that further price improvement could follow and that MAAD is more accurately reflecting Smart Money tendencies than other breadth-based indicators.
  • 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 recent 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

 

9/9

9/10

9/11

9/12

9/13

9/13

9/30

S&P 500 Index

SELL 1636.87

SELL 1635.63

SELL 1635.33

SELL 1638.05

SELL 1638.25

SELL 1649.34

SELL 1448.73

Dow Jones Industrials

SELL 14831.81

SELL 14814.37

SELL 14805.00

SELL 14821.72

SELL 14813.32

BUY 15497.13

SELL 13465.21

NASDAQ Composite

SELL 3597.65

SELL 3596.45

SELL 3596.56

SELL 3607.40

SELL 3609.22

SELL 3519.12

SELL 3044.23

Value Line Index

SELL 3831.74

SELL 3826.34

SELL 3828.97

SELL 3828.38

SELL 3828.30

SELL 3829.01

SELL 3180.51

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