Stock indexes gain fractions in light volume

MAAD & CPFL Review

 

Market Snapshot for session ending 11-11-13
 

Last

+1.28

%Change

S&P 500 Index

1771.89

+1.28

+.07%

Dow Jones Industrials

15783.10

+21.31

+.14%

NASDAQ Composite

3919.78

+.55

+.01%

Value Line Index

4166.86

+8.33

+.20%

Russell 2000

1101.50

+1.53

+.14%

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

  • Major indexes posted small gains Monday on noticeably less holiday volume.
  • Market activity decreased 26% compared to last Friday.
  • To take on more negative tone, S&P 500 must sell below lower edge of 10-Day Price Channel (1756.38 through Tuesday). Intermediate Cycle remains positive so long as S&P holds above lower edge of 10-Week Price Channel (1661.15 through November 15).
  • VBVI, our VIX-based volatility indicator, moved to point Monday, 96.81%, equal to November 6 plot high and highest level since October 9 low. Indicator is still “Overbought” short-term. At September 19 short-term high VBVI peaked at 92.4%.
  • Daily MAAD was slightly negative Monday with 8 issues higher, 11 lower, and 1 unchanged. Indicator made fractionally higher new high last Friday and reached best level since March 2009. Daily MAAD remains above uptrend line stretching back to November 2012. Daily MAAD Ratio was last at 1.14.
  • Daily CPFL was positive by 1.30 to 1 Monday after hitting new short-term high and best level since October 9 on November 6. Indicator remains well below June 11 short to intermediate-term high, uptrend line stretching back to October 2011, and major resistance peak made February 2011. CPFL Daily Ratio was last at 1.14.

Market Overview – What We Think:

  • Short-term advance begun after October 9 lows (1646.47—S&P 500) is probably in an end game.
  • Despite recent switch in market roles to extent Dow has made new highs while lesser blues have not, all indexes look vulnerable on near term trend.
  • Nothing but new highs in indexes and Daily MAAD would erase bearish short-term prognosis.
  • We are disappointed, however, that Daily MAAD has hardly been a harbinger of market weakness if it turns out further selling will follow. One way to interpret Daily MAAD reluctance, however, would be to suggest no serious selling will develop. That’s possible, but at some point such a supposition could prove to be wishful thinking, given maturity of larger Intermediate Cycle.
  • And then there is Daily CPFL that, despite strength for the past month coincident with short-term rally in pricing, remains in longer-term downtrend while holding nearly 50% below June 11 short to intermediate high in indicator. That longer-term negative divergence is bearish.

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

11/11

11/12

11/13

11/14

11/15

11/15

11/30

S&P 500 Index

SELL 1755.93

SELL 1756.38

SELL 1758.23

SELL 1756.34

SELL 1754.70

SELL 1661.15

SELL 1500.00

Dow Jones Industrials

SELL 15539.54

SELL 15542.77

SELL 15563.05

SELL 15570.84

SELL 15574.23

SELL 14975.85

SELL 13944.86

NASDAQ Composite

BUY 3946.23

BUY 3946.72

BUY 3948.81

BUY 3946.88

BUY 3941.37

SELL 3672.28

SELL 3145.05

Value Line Index

BUY 4183.50

BUY 4183.67

BU 4184.86

BUY 4183.76

BUY 4178.92

SELL 3911.47

SELL 3358.97

Russell 2000

BUY 1113.80

BUY 1112.00

BUY 1111.16

BUY 1109.27

BUY 1107.20

SELL 1040.69

SELL 887.74

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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