Stock market prices enthusiastic, indicators gloomy

Index Daily stops Weekly Monthly
7/4 7/5 7/6 7/7 7/8 7/8 7/31

S&P

Last
1339.67

%Chg
+5.6%

Holiday

SELL
1271.84

SELL
1276.76

SELL
1283.00

SELL
1290.26

SELL
1348.2

SELL
1168.05

Dow 30

Last
12582.77

%Chg
+5.4%

Holiday

SELL
11977.91

SELL
12018.50

SELL
12085.08

SELL 12132.45

SELL
12637.34

SELL
10906.74

NASD
Comp.

Last
2816.03

%Chg+6.1%

Holiday

SELL
2647.06

SELL
2662.75

SELL
2681.56

SELL 2701.29

SELL
2838.54

SELL
2439.35

Val. Line

Last
3065.47

%Chg
+5.3%

Holiday

SELL 2900.55

SELL
2915.33

SELL
2931.67

SELL
2949.98

SELL
3099.06

SELL
2584.50

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.

McCurtain Most Actives Advance/Decline Line (MAAD)

Even though index prices rallied smartly over the past several sessions and even though MAAD also rose, the indicator via more sensitive Daily data remains substantially below its early March statistical highs. The net weakness is a continuing suggestion that Smart Money has not viewed recent market strength as a resumption of the Major Cycle uptrend that began in March 2009. A more likely suggestion is that they see strength as merely a countertrend rally into a developing Intermediate-term high which could be followed by a resumption of market weakness on the Intermediate Cycle.

The failure of MAAD to demonstrate much improvement on the larger weekly trend simply confirms that suspicion. Nothing but new highs in MAAD would suggest a resumption of the bull market in terms of the internal strength required.

Click charts to enlarge

McCurtain Call/Put Dollar Value Flow Line (CPFL)

Options players have been buying, net, since the June lows, but the amount of call options they have been purchasing relative to put options has only been marginally favorable. In fact, CPFL is, like MAAD, nowhere near making new highs, even though index prices have recovered a substantial portion of the market losses sustained since the May highs. The failure of CPFL to confirm that strength suggests options players remain just as skeptical of this market now as they were following the February and then the May highs. Nothing but new highs in CPFL would indicate a change in attitude by the call/put crowd.

Click charts to enlarge

Next page: Conclusion

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