Stock market to new highs for move...

...but TseTse flies uncertain

McCurtain Call/Put Dollar Value Flow Line (CPFL)

CPFL hit another string of new highs last week, as options players apparently continue to believe that the stock market is safer than not. And so long as this sentiment indicator continues to remain favorable, we can only presume that the net bias of equity prices is on the upside. If, however, when the time comes that a short-term pullback develops and then new highs follow, but CPFL does not confirm that resumption of strength, we would have to throw out the caution flag since we have never seen an instance in its nearly 28 years of history that CPFL has accrued that it did not correctly predict future market action.

Click charts to enlarge

Conclusion

Stock market prices rallied last week, but indicator crosscurrents continue to suggest uncertain waters lie ahead. While our two key indicators, MAAD and CPFL, are now in synch on all cycles with the broad market and continue to suggest higher prices could evolve, other indicators with good historical records are contrarily suggesting that while the “yellow flag of caution” has not yet been fully unfurled, there is nevertheless reason to suspect at least a pullback on the smallest Short-term Cycle. How such weakness might unfold would determine the staying power of the larger Intermediate trend and then the Major Cycle.

In the meantime, and lacking any concerted weakness, we can only defer to the market and its recent tendency toward higher prices. As always, it is prices that are bought and sold, not indicators.

MAAD data for past 30 Weeks* CPFL data for past 30 Weeks

Date

NYSE Adv

NYSE Dec

Date

OEX Call $Volume

OEX Put $Volume

6-18-10

11

9

6-18-10

357965

119532

6-25-10

5

15

6-25-10

91068

599114

7-2-10

4

16

7-2-10

1034509

771231

7-9-10

18

2

7-9-10

635690

110808

7-16-10

9

11

7-16-10

171633

445073

7-23-10

16

4

7-23-10

322870

174663

7-30-10

15

5

7-30-10

199970

217368

8-6-10

15

5

8-6-10

271701

115037

8-13-10

3

16

8-13-10

132060

409972

8-20-10

8

12

8-20-10

176830

488032

8-27-10

6

14

8-27-10

207995

222943

9-3-10

17

3

9-3-10

488323

102016

9-10-10

12

7

9-10-10

287697

82863

9-17-10

15

5

9-17-10

289703

112410

9-24-10

12

8

9-24-10

209124

100570

10-1-10

9

11

10-1-10

145020

121894

10-8-10

14

6

10-8-10

394156

98483

10-15-10

10

10

10-15-10

476975

115923

10-22-10

11

9

10-22-10

2575024

116468

10-29-10

10

10

10-29-10

376133

120924

11-5-10

13

7

11-5-10

547056

71345

11-12-10

5

15

11-12-10

203906

305387

11-19-10

7

13

11-19-10

241420

143672

11-26-10

5

15

11-26-10

116916

149196

12-3-10

16

4

12-3-10

701973

55878

12-10-10

15

5

12-10-10

395991

42814

12-17-10

9

11

12-17-10

441634

61008

12-24-10

17

3

12-24-10

177600

88159

12-31-10

16

4

12-31-10

154527

60647

1-7-10

16

4

1-7-10

458733

97512



*Note: All data is for week ending on Friday even though ending date may be a holiday.
Unchanged issues in MAAD calculations are not counted.

MAAD data for past 30 days** CPFL data for past 30 Days

Date

NYSE Adv

NYSE Dec

Date

OEX Call $Volume

OEX Put $Volume

11-26-10

6

14

11-26-10

7371

22639

11-29-10

11

8

11-29-10

134852

34060

11-30-10

7

13

11-30-10

33479

24500

12-1-10

16

4

12-1-10

85253

28247

12-2-10

15

5

12-2-10

182715

28232

12-3-10

17

3

12-3-10

115848

24527

12-6-10

8

11

12-6-10

40933

17375

12-7-10

8

12

12-7-10

80650

30593

12-8-10

13

7

12-8-10

50397

15116

12-9-10

15

5

12-9-10

108582

14892

12-10-10

13

7

12-10-10

72621

16651

12-13-10

9

11

12-13-10

283329

35410

12-14-10

6

14

12-14-10

40676

17570

12-15-10

8

12

12-15-10

96633

33646

12-16-10

11

9

12-16-10

40412

30436

12-17-10

10

9

12-17-10

91895

20598

12-20-10

15

3

12-20-10

98065

26159

12-21-10

18

2

12-21-10

19915

33054

12-22-10

13

6

12-22-10

17751

17000

12-23-10

3

16

12-23-10

52317

31245

12-24-10

Holiday

12-24-10

Holiday

12-27-10

14

6

12-27-10

13115

9815

12-28-10

11

9

12-28-10

53716

15811

12-29-10

10

9

12-29-10

37335

20386

12-30-10

10

10

12-30-10

75836

15710

12-31-10

15

5

12-31-10

26220

13820

1-3-11

16

4

1-3-11

134306

31093

1-4-11

12

7

1-4-11

140762

19483

1-5-11

16

3

1-5-11

78925

30698

1-6-11

7

13

1-6-11

97949

28157

1-7-11

10

10

1-7-11

48312

21874

**Note: Unchanged issues are not counted.

Robert McCurtain is a technical analyst, market timer and private investor based in New York City. If you would like to read more about how the CPFL is constructed, read a Futures article on the concept. This will take you to the MAAD article. Robert can be reached at traderbob@nyc.rr.com.

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