Stock market's bull run destined to end -- but when?

Weekly Review: MAAD, CPFL indicator analysis

McCurtain Call/Put Dollar Value Flow Line (CPFL)

CPFL lost a little ground last week, despite modestly higher index pricing. The Daily CPFL Ratio moved toward “Neutral” (last at .94) and the Weekly CPFL Ratio remains toward “Overbought” (2.35).

While the indicator demonstrated some improvement on the smaller cycle from the end of June through the mid-September highs, that strength was lackluster at best and has left the indicator nowhere near overcoming major resistance put in place the week ending February 25, 2011, despite higher index prices in the wake of the spring 2011 highs. That negative divergence is an ongoing suggestion options players, from a Dollar Value point-of-view, have lacked the commitment evident in previous rallies.

cpfl, indicator, oex

cpfl, indicator, oex

Conclusion

A market without indicator confirmations eventually plays out like a team of explorers that loses its maps and supplies. The momentum of the expedition will carry the effort forward for a period of time, but eventually the absence of critical components will stall efforts. The stock market is no different. Without sustaining volume and broad participation, all rallies end. While the advance since March 2009 has carried on longer than we expected, unless key negative divergences between MAAD, CPFL, CV, and Momentum are eliminated in favor of pricing, we continue to suspect this stock market is surviving on borrowed time.

The fact the S&P rallied 106% from March 2009 through the spring of 2011 and only gained 6.6% from the high of May 2011 to date could be evidence that like the California Gold Rush of 1848-49, players late to the game could come up empty handed.

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

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

9-4-12

7

12

9-4-12

22964

20498

9-5-12

8

10

9-5-12

47187

14990

9-6-12

19

1

9-6-12

49388

20763

9-7-12

14

6

9-7-12

73777

10043

9-10-12

4

16

9-10-12

8682

29510

9-11-12

14

6

9-11-12

51478

20915

9-12-12

13

7

9-12-12

11891

13828

9-13-12

18

2

9-13-12

103979

25464

9-14-12

17

2

9-14-12

99013

26913

9-17-12

5

14

9-17-12

42518

8661

9-18-12

10

10

9-18-12

39120

11537

9-19-12

14

6

9-19-12

20304

13568

9-20-12

7

13

9-20-12

59078

14151

9-21-12

9

11

9-21-12

31947

15633

9-24-12

3

17

9-24-12

29324

13174

9-25-12

3

17

9-25-12

9041

33846

9-26-12

6

14

9-26-12

33635

38648

9-27-12

16

3

9-27-12

23441

15166

9-28-12

3

16

9-28-12

17376

18362

10-1-12

14

6

10-1-12

24889

19709

10-2-12

12

7

10-2-12

5764

13411

10-3-12

12

8

10-3-12

12679

19419

10-4-12

15

5

10-4-12

19561

14690

10-5-12

7

13

10-5-12

18107

18960

*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

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

9-7-12

17

2

9-7-12

192729

30202

9-14-12

17

3

9-14-12

295058

62406

9-21-12

4

16

9-21-21

140898

41443

9-28-12

6

14

9-28-28

68066

104869

10-5-12

15

5

10-5-12

82790

46425

**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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