S&P 500 Analysis for week of 5/16/11

Current Primary Trend: Bull Signal - Initiated Sept. 13th

The Primary Trend chart determines our long term market strategy of being long or in cash. The PT is the primary trend. Once the medium term trend is in the same direction as the PT chart we then enter the market. Short-term information should assist in your execution of trades. Take the emotion out of your investment decisions. Implementing a trend-following crossover strategy - has no guess work, no sophisticated technical analysis, and no judgement.

Trend Model:

Short-Term Trend: (time frame - days to weeks) - Short-term trend information is used in conjunction with the technical analysis of the particular stock you want to purchase, should help you to get optimum execution on entry and exit positions.

Medium-Term Trend: (time frame - weeks to months) Determines overall timing: possible exit and re-entry points, or entry points when the primary trend is in a corresponding trend.

Primary Trend: (time frame - months to years ) Long-term trend and possible entry points. Current Status - Bull Market

We feel the S&P 500 data gives the broader view of the market.

• NASDAQ usually leads both the up and down market trends.
• Its estimated that 70% of trades are done by High Frequency platforms. Total volume of the NYSE consist of about 28% of the total market volume with around 85% of the NYSE being institutional volume. The NYSE still has the largest institutional investor up/down volumes and should provide a hint at the big institutions buying and selling. (volume accumulation/distribution)
• Indices Summary Charts

Risk-Reward Advisor

MARKET CORE STRENGTH INDEX (MCSI)
Week of 5/16/2011 - version1.08

11/30 - 37% - Update 5/16 - Market action had the MCSI declining to 6/20 - 20% pushing into the Danger Zone. This confirms the trend model's earlier short-term negative bias signal. Overall you should be out of the market waiting to see where we are headed. This could be just a normal market correction. We still are in a positive long-term trend. 1328-1329 area is still a key support level with 1300 being the next support.

• bullish zone: 21-30 - 70%

• caution zone: 10 to 20

• danger zone: 0 to 9 - 30%

MCSI Summary

MOMENTUM: Advantage - Bears (Aroon & Williams% - barely positive) 2/8
PRICE: Advantage - Bears (NASDAQ 3/10 - barely positive) 3/8
BREADTH: Advantage - Bears 2/9
TREND: Advantage - Bulls (short-term slope - negative with medium slope down trending) 4/5

Commentary for short & intermediate-term market indicators.

Weekly indicators are turning down or have a negative bias. Weekly STOCH is below EMA & Williams is close to being bearish. Check the weekly StochRSI, notice the correlation when EMA drops below the .50 line. 15 day short time frame SLOPE is bearish with the100 day being positive but has been trending down since the February high. Watch RSI for momentum strength during the week. (The 30 is more important and if it is less then 5 above the 50 line the risk increases. You want all 3 to be above each other for a healthy trend. Being 5 above each other shows good prospects of momentum.) We wait for what the house deals for a hand next week, & see if the odds increase or decrease

Bull vs. Bear

• Fannie Mae wants More $$
• Job Claims
• April Retail Sales
• The four-year presidential cycle.
• Seasonality: buy in the fall go away in May.
• POMO: ends June 30th.
• U.S. & European sovereign debt crisis
• Stagflation

All of our opinions are that, an opinion. Use your own analysis of the market condition indicators. Trend & MCSI Risk Model - Information. Visit our blog