Stock market short-term trend oversold, shaky intermediate cycle

Weekly Review: MAAD, CPFL indicator analysis

Unfortunately, MAAD did not confirm strength in the S&P when it broke above 1370.58 in early March 2012. That MAAD failure and then the second non-confirmation in September 2012 underscored the fact Smart Money, which had participated during the first and second legs up from the March 2009 lows had not participated to the same extent in the third and fourth legs of the long-term uptrend. Those variances when plugged into an historical perspective suggest strength in the market since May 2011 has been fueled by weaker and weaker hands. Such weakness does not usually accrue to the benefit of the bulls.

Daily S & P 500 Emini Futures contract with Cumulative Volume (CV)

daily, emini, cumulative, volume

Weekly S & P 500 Emini Futures contract with Cumulative Volume (CV)

weekly, emini, cumulative, volume

Our Call/Put Dollar Value Flow Line (CPFL) has also demonstrated negative divergences similar to those exhibited by MAAD. After peaking in early 2011 (week of February 25), CPFL has underscored none of the strength in the S&P 500. Although these indicators are directional in that they move with the market, it is their confirmation of price action, or lack of it, that is the issue. CPFL, like MAAD, has been looking askance at this market for the past 18 months. Similarly, Cumulative Volume (CV) and Momentum on the Intermediate and Major Cycles have also underperformed index pricing.

Index Daily / Weekly / Monthly Stops Weekly Monthly
 

11/5

11/6

11/7

11/8

11/9

 11/9

11/30

S&P 500 Index

BUY 1438.37

BUY 1433.67

BUY 1429.67

BUY 1427.82

BUY 1427.54

BUY 1451.21

SELL 1277.32

Dow Jones Industrials

BUY 13359.82

BUY 13312.41

BUY 13276.34

BUY 13260.17

BUY 13252.01

BUY 13499.72

SELL 12198.68

NASDAQ Composite

BUY 3041.02

BUY 3030.67

BUY 3019.74

BUY 3016.08

BUY 3016.04

BUY 3149.46

SELL 2738.24

Value Line Index

BUY 3041.22

BUY 3032.20

BUY 3027.17

BUY 3033.01

BUY 3041.34

BUY 3093.61

SELL 2734.45

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.

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