Stock market approaching critical point on intermediate cycle

Weekly Review: MAAD, CPFL indicator analysis

McCurtain Call/Put Dollar Value Flow Line (CPFL)

Daily CPFL remains in a slightly rising trend begun nearly a year ago with points of support December 19, 2011, June 25, 2012, and November 15, 2012. A downside break below that line would be long-term bearish. Militating against a continuation of the marginally positive trend is the fact that the Daily CPFL Ratio has moved back toward “Overbought” territory (1.47) even though Weekly CPFL remains “Oversold” (.52) to suggest any near-term weakness could be developing within the context of an intermediate-term negative.

There is also the fact that Weekly CPFL remains well below a major high made back in June 2007 a few months before the 2008-2009 bear market began. That negative divergence is an ongoing suggestion that while options players participated in the uptrend since March 2009, their levels of enthusiasm remain well below points reached in March 2009, let alone in earlier bull trends.

daily, cpfl, oex

cpfl, weekly, oex

Conclusion

If the short-term rally underway since the November 16 lows (1343.35—S&P 500) is entering into an endgame, it could be viewed in retrospect as nothing but a reflex rally within the context of a larger Intermediate Cycle negative that peaked back on September 14. That’s our suspicion at this juncture.

But if there is more underlying resilience to this market than we are expecting, early bullishness from such indicators as Daily MAAD could be a sign this rally could continue higher. Thing is, however, another 30 points in the S&P 500 and the upper edge of the 10-Weekly Price Channel would be challenged and the bellwether would be well beyond the upper limit of a “normal” 40% to 60% correction, given the fact the S&P has already retraced 61.2% of its decline since that September 14 high (1474.51). Nothing but strength above that September price high will re-assert the bull market begun in March 2009.

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

10-24-12

5

14

10-24-12

13195

28399

10-25-12

11

8

10-25-12

18594

32595

10-26-12

5

14

10-26-12

15436

20380

10-29-12

Closed

---

10-29-12

Closed

---

10-30-12

Closed

---

10-30-12

Closed

---

10-31-12

9

10

10-31-12

9884

11891

11-1-12

17

3

11-1-12

86326

16444

11-2-12

5

14

11-2-12

12443

26349

11-5-12

14

5

11-5-12

11722

14660

11-6-12

12

7

11-6-12

45048

15298

11-7-12

0

20

11-7-12

20788

52029

11-8-12

3

17

11-8-12

16602

92193

11-9-12

11

9

11-9-12

25606

54375

11-12-12

13

7

11-12-12

8515

54791

11-13-12

6

13

11-13-12

23074

65737

11-14-12

3

17

11-14-12

16161

95621

11-15-12

11

9

11-15-12

46018

81180

11-16-12

15

5

11-16-12

40162

46466

11-19-12

19

1

11-19-12

38924

21109

11-20-12

13

7

11-20-12

21081

21565

11-21-12

15

4

11-21-12

9525

8770

11-22-12

Holiday

---

11-22-12

Holiday

---

11-23-12

19

1

11-23-12

29866

8250

11-26-12

10

9

11-26-12

25831

10117

11-27-12

6

14

11-27-12

9673

23131

11-28-12

17

1

11-28-12

27896

19815

11-29-12

18

2

11-29-12

86001

24299

11-30-12

9

10

11-30-12

22585

14307

12-3-12

5

14

12-3-12

17418

14769

12-4-12

13

7

12-4-12

7473

11819

12-5-12

15

5

12-5-12

10641

35677

12-6-12

13

7

12-6-12

11237

9199

12-7-12

14

5

12-7-12

21423

8692

*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

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

10-19-12

10

10

10-19-12

40632

219576

10-26-12

6

14

10-26-12

43539

151159

11-2-12

15

5

11-2-12

31681

39436

11-9-12

0

20

11-9-12

51223

261506

11-16-12

3

17

11-16-12

104817

333252

11-23-12

18

2

11-23-12

136708

34280

11-30-12

12

8

11-30-12

152468

59828

12-7-12

15

5

12-7-12

53407

49271

**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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