Stock market drama may be close to resolution point

Weekly Review: MAAD, CPFL indicator analysis

McCurtain Call/Put Dollar Value Flow Line (CPFL)

CPFL has been a relative non-performer for months. While the indicator demonstrated some improvement following the June lows and into late September as the market put in place what were at least short-term highs, it is the longer-term stance of the indicator that remains relevant. After peaking the week ending February 25, 2011 and several weeks before index prices made their Intermediate Cycle highs, CPFL has consistently failed to get back in synch with pricing.

That negative divergence between the major indexes and CPFL is yet another sign that the quality of the market participation for the better part of the past two years is of a lesser nature than that which propelled prices higher, even after the March 2009 lows. Clearly, options players using Dollar Value measurements have not liked this market for quite awhile and have not been willing to make major commitments to it as was the case during other broad, bullish phases.

oex, cpfl

oex, cpfl, weekly

Conclusion

Index pricing declined last week and NYSE trading volume shrank. The market looks a little “Oversold” on the Minor Cycle and index pricing is holding at or near uptrend lines stretching back to the June lows. From that action one might presume yet another short-term pullback may be reaching a termination point and that renewed buying could soon propel index pricing to new intermediate term highs.

Perhaps.

Or market deterioration could be a sign that the rally since June continues to lose steam as has the uptrend that began in March 2009. From an historical perspective, we continue to suspect the negative divergences in our key indicators since the spring of 2011 will prove to be prescient and that index price strength since the October 2011 lows will prove to be an endgame in a bull trend many will view at some point as nothing but a poorly fueled “bounce” in the wake of the 2007-2008 bear 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

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

10-8-12

4

16

10-8-12

5046

21196

10-9-12

3

17

10-9-12

18477

31201

10-10-12

4

15

10-10-12

15397

37527

10-11-12

12

7

10-11-12

9410

38706

10-12-12

5

15

10-12-12

12705

33183

*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

3-23-12

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

10-12-12

4

16

10-12-12

23119

203431

**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.

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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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