Stock market's rally since November not feeling any warmer

Weekly Review: MAAD, CPFL indicator analysis

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

emini, cumulative, volume

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

weekly, emini, cumulative volume

There is also another truism. The bull market that was initiated after the price lows of March 2009 remains intact. There have been no less than four downside attempts on the Intermediate Cycle since that trend began. The most serious lasted from May 2011 through early October 2011, but even that pullback was followed by new index price highs followed. What did not follow, however, after the May 2011 highs was new highs in our key indicators including the Most Actives Advance/Decline Line (MAAD), the Call/Put Dollar Value Flow Line (CPFL), Cumulative Volume (CV), and long-term Momentum.

Index Daily / Weekly / Monthly Stops Weekly Monthly
 

12/31

1/1

1/2

1/3

1/4

1/4

1/31

S&P 500 Index

BUY 1439.28

HOL

BUY 1436.90

BUY 1419.99

BUY 1431.43

BUY 1426.37

SELL 1310.68

Dow Jones Industrials

BUY 13302.30

HOL

BUY 13264.12

BUY 13240.04

BUY 13210.95

BUY 13211.89

SELL 12445.73

NASDAQ Composite

BUY 3033.90

HOL

BUY 3029.59

BUY 3023.22

BUY 3016.11

BUY 3019.26

SELL 2809.46

Value Line Index

BUY 3157.12

HOL

BUY 3137.02

BUY 3131.38

BUY 3127.88

SELL 2965.34

SELL 2779.90

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.

And while we know repetition of the fact that our indicators have confirmed little if any of the strength in the most recent rally is becoming tedious, we continue to see no reason to believe that equity prices are any more advantageous now than they have been since May 2011. With a net gain in the S&P 500 since May 6, 2011 of just over 2%, the average investor would have been better off leaving those assets in a two-year bank CD. Will the long-term trend change? Yes, of course, but as things now sit and even though the long-term trend remains intact, which is no doubt a bullish advantage, history suggests that a bull trend that lacks internal indicator strength is operating on borrowed time.

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