McCurtain Most Actives Advance/Decline Line (MAAD)
The S&P 500 rallied to new short and intermediate-term highs last week and, via its weekly closing level, to its best finish since December 2007. There is no denying that. But what is also undeniable is that Daily MAAD failed to confirm S&P strength last week after peaking back on December 20 and despite the fact Daily MAAD was leading on the upside following its lows back on November 14, two days before the broad market made its lows. Daily MAAD outperformed the S&P off of its November lows by quickly rallying above mid-September highs. Although the current, negative, short-term divergence could be eclipsed with a couple days of solid market gains, the fact there is even a divergence at this point is worrisome.
In addition, Daily MAAD remains well below a longer and Intermediate Cycle resistance high made back on March 20. The indicator has recovered about 50% of the losses suffered since March, but nothing but strength back above that previous peak would cause us to become more optimistic about longer-term S&P prospects relative to the highs made in May 2011.
McCurtain Call/Put Dollar Value Flow Line (CPFL)
Daily CPFL rallied to a new short-term high last week and kept alive the shallow uptrend in the indicator that has been extant for the past year. But the short-term trend is “Overbought” (2.81) even though the larger Intermediate Cycle in CPFL remains somewhat “Oversold” (.89).
What is also quite evident is that on the longer-term, Weekly CPFL is nowhere near overcoming major resistance put in place the week ending February 25, 2011, let alone the major highs created in June 2007. Options players on a Dollar Value basis have been more enthusiastic of late, but on the longer-term they have not demonstrated a major reversal in thinking that would presage remarkably higher market pricing.