Equity index price levels depend on cycle

Weekly Review: Are equities art?

Conclusion

The August 21 intraday and short-term high (1426.68—S&P 500) could prove to be the peak of the rally that began three months ago back on June 4 (1266.74—S&P 500). The proof of that assumption will be the ability of that August 21 high to hold in the sessions just ahead considering the fact the larger Intermediate Cycle remains positive and is still in an uptrend. Since we know for a fact the intermediate advance will be terminated at some point, the issue is now whether or not the August high was “the” high.

Adding to the mix is the fact that short-term “Overbought” conditions, especially in MAAD and CPFL, have given way to short-term “Oversold” levels. But overriding those realities is the additional fact that in the early stages of a larger cycle reversal, the trend toward near-term “Oversold” is not so much a buying opportunity as it is a suggestion the market dynamic is changing from positive to negative. The ability of that August high in the S&P to hold, or not, will determine the outcome in terms of whether or not near-term “Oversold” conditions are currently meaningful.

But underscoring all of this is the reality the broad market continues to exhibit weak volume, or lesser than “normal” activity, as our key indicators continue to dislike market price action. History suggests the best bet is on the indicators EVEN IF some investors continue to treat equity prices as “Art,” just as they are doing at the high end of the real estate market.

MAAD Daily data for past 30 days*

CPFL data for past 30 Days

Date

NYSE Adv

NYSE Dec

Date

OEX Call $Volume

OEX Put $Volume

7-23-12

8

12

7-23-12

35642

28992

7-24-12

3

17

7-24-12

36891

36155

7-25-12

13

7

7-25-12

33864

25110

7-26-12

13

7

7-26-12

74148

31857

7-27-12

19

1

7-27-12

10379

24155

7-30-12

8

11

7-30-12

20610

25618

7-31-12

8

12

7-31-12

10228

17013

8-1-12

7

13

8-1-12

49830

18571

8-2-12

1

19

8-2-12

39269

39289

8-3-12

17

3

8-3-12

75474

29920

8-6-12

13

7

8-6-12

27005

21005

8-7-12

16

4

8-7-12

44584

21424

8-8-12

14

4

8-8-12

16616

19266

8-9-12

13

7

8-9-12

21693

11773

8-10-12

11

8

8-10-12

18285

11473

8-13-12

6

14

8-13-12

33026

8497

8-14-12

6

14

8-14-12

19615

14050

8-15-12

13

7

8-15-12

19291

7879

8-16-12

15

4

8-16-12

68539

15856

8-17-12

11

9

8-17-12

41276

17198

8-20-12

8

10

8-20-12

20413

21365

8-21-12

9

11

8-21-12

13334

30286

8-22-12

10

10

8-22-12

25059

29209

8-23-12

3

16

8-23-12

9023

29522

8-24-12

14

6

8-24-12

15697

12473

8-27-12

10

9

8-27-12

4942

11962

8-28-12

4

15

8-28-12

3624

7606

8-29-12

13

6

8-29-12

5719

10649

8-30-12

1

18

8-30-12

13887

22730

8-31-12

18

2

8-31-12

13679

23261

*Note: Unchanged issues are not counted.

MAAD Weekly data for past 30 Weeks**

CPFL data for past 30 Weeks

Date

NYSE Adv

NYSE Dec

Date

OEX Call $Volume

OEX Put $Volume

2-10-12

4

16

2-10-12

139340

105129

2-17-12

16

2

2-17-12

216140

46807

2-24-12

8

12

2-24-12

54372

58835

3-2-12

15

5

3-2-12

78724

60272

3-9-12

12

8

3-9-12

154499

66996

3-16-12

17

3

3-16-12

391213

90255

3-23-12

8

12

3-23-12

114104

81344

3-30-12

17

3

3-30-12

123363

85080

4-6-12

3

17

4-6-12

112072

99729

4-13-12

2

18

4-13-12

142511

224456

4-20-12

10

9

4-20-12

61493

132916

4-27-12

12

8

4-27-12

223704

45908

5-4-12

1

18

5-4-12

55698

270290

5-11-12

5

15

5-11-12

89392

179817

5-18-12

1

19

5-18-12

63126

601766

5-25-12

12

8

5-25-12

128890

104849

6-1-12

0

20

6-1-12

44478

278761

6-8-12

19

1

6-8-12

206062

57765

6-15-12

17

3

6-15-12

224947

79354

6-22-12

11

9

6-22-12

41604

118995

6-29-12

11

9

6-29-12

215980

45870

7-6-12

9

11

7-6-12

22987

66734

7-13-12

7

13

7-13-12

115325

165598

7-20-12

11

9

7-20-12

155286

106164

7-27-12

15

5

7-27-12

469554

55021

8-3-12

14

4

8-3-12

189964

56326

8-10-12

18

2

8-10-12

127913

51441

8-17-12

11

9

8-17-12

168381

34193

8-24-12

5

14

8-24-12

61567

91299

8-31-12

4

16

8-31-12

27713

56889

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

<< Page 5 of 5
About the Author
Robert McCurtain

Robert McCurtain is a technical analyst/market timer, private investor and financial markets consultant based in New York City. He can be reached at traderbob@nyc.rr.com.

If you would like to read more about how the CPFL is constructed, read a Futures article on the concept. This link will take you to the MAAD article. A two-part series about system development with the MAAD also is available. 

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