Market, indicators sink, as major cycle momentum turns negative

Weekly Review: Major Cycle Momentum turned negative

Bull, Bear, Market forces Bull, Bear, Market forces

Market Snapshot:

 

Last

Week Chg

Week %Chg

S&P 500 Index

1278.04

-39.78

-3.01%

Dow Jones Industrials

12118.57

-336.26

-2.69%

NASDAQ Composite

2747.48

-90.05

-3.17%

Value Line Arithmetic Index

2708.83

-106.90

-3.79%

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

Intermediate Cycle (Medium trend lasting weeks to several months) Negative

Major Cycle (Long-term trend lasting several months to years) Neutral / Negative

Well, so much for that short-term low…. The big clue the May 18 intraday bottom at 1291.98—S&P 500 might not hold came when our Most Actives Advance/Decline Line (MAAD) sank to a new short-term low last Wednesday. That downside break underscored the fact the so-called Smart Money crowd, which the indicator measures, was more interested in net selling than net buying. With Friday’s sharp losses and more weakness in MAAD, the indicator is now suggesting the S&P 500 ought to be closer to 1225 than 1280. That’s another way of saying there could be more net weakness in this market before some hesitation develops, interim short-covering notwithstanding.

But there’s another theme that has been developing for quite awhile that we would like to revisit and elaborate upon. For a change, we’ve put our two regular MAAD charts, Daily and Weekly, up front with an addition. The third chart plots Monthly MAAD and S&P 500 data back to April 1961. In that chart it’s possible to see how MAAD has performed over the past 50-plus years on the very long term. In fact, for those readers who choose to follow this indicator, an amplification of the MAAD application will be featured in the August and September issues of Futures magazine. In that two part series the history of MAAD will be demonstrated as it compares to the more traditional, and in our opinion highly flawed and error prone, NYSE Advance/Decline Line.

Daily S & P 500 with Most Actives Advance/Decline Line (MAAD)

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Weekly S & P 500 with Most Actives Advance/Decline Line (MAAD)

weekly, maad, technical, analysis, indicator, s&p


Monthly S & P 500 with Most Actives Advance/Decline Line (MAAD)

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