McCurtain Most Actives Advance/Decline Line (MAAD)
Daily MAAD sank to a new low last Wednesday to totally eliminate all of its gain since the June 4 lows. What that means is that MAAD and what we refer to as the Smart Money” crowd have underscored virtually none of the rally in the S&P 500 from its June 4 low (1266.74) until the high on September 14 (1474.51).
Could it be that MAAD is simply setting up for yet another negative divergence in front of another rally that will carry the S&P and the major indexes back above those September/October lows? Yes, it’s possible, but like it or not, MAAD losses over the past several weeks have been troubling. “Oversold” conditions aside, the Intermediate Cycle is now negative. The lower edges of 10-Month Price Channels (1277.32—S&P 500) that continue to define the downside “failsafe” points on the long-term trend are within view and In another several days those sell points will notch higher at the beginning of the new month (1293.26—S&P 500). Simply put, the market must rally or negative MAAD divergences will prove to be prescient.
McCurtain Call/Put Dollar Value Flow Line (CPFL)
CPFL was negative again last week. On a Dollar Value basis there were 3.17 times as many Puts as Calls. After peaking with the market back in September, Daily CPFL has been moving steadily lower. The only positive mitigating factor with the indicator is the fact it is now deeply “Oversold” on the Daily Cycle at it has returned to a defined uptrend line stretching back to lows made nearly a year ago. If that trend line is broken that would be bearish. If it is not, then the September high must be overcome for the indicator to re-assert its longer term uptrend. Of the two possibilities, we suspect the indicator will be unable to make new highs.