Stocks gain, but key technical highs remain selective

Weekly Review: MAAD, CPFL indicator analysis

Stock index, chart, technical analysis Stock index, chart, technical analysis

 

Market Snapshot:
 

Last

Week Chg

Week %Chg

S&P 500 Index

1472.05

+5.58

+.38%

Dow Jones Industrials

13488.43

+53.23

+.39%

NASDAQ Composite

3125.64

+23.98

+.77%

Value Line Arithmetic Index

3285.89

+8.34

+.25%

Minor Cycle (Short-term trend lasting days to a few weeks) Positive

Intermediate Cycle (Medium trend lasting weeks to several months) Positive

Major Cycle (Long-term trend lasting several months to years) Positive / Neutral

Last week the Value Line index rallied to a new all-time closing high at 3285.89. Coincidentally, the S&P 500 rallied to its best level since December 2007 and just before the broad market entered the 2008/2009 bear market. But those performances were solos. The Dow Jones Industrial Average and the NASDAQ Composite index have yet to better intermediate-term resistance created in mid-September. Cumulative Volume (CV) confirmed NONE of the strength on the upside in ANY index and remains well below September resistance. At the same time, our Most Actives Advance/Decline Line (MAAD) continues to hold below its December 20 short-term resistance high, despite pronounced market gains into the New Year. Our Call/Put Dollar Value Flow Line (CPFL) remains in a near-term uptrend initiated after the November lows, but has yet to better September resistance. And Momentum has confirmed NONE of the recent highs on either the Minor or Intermediate Cycles.

So what’s going on?

One thing that probably perked up the interest of many investors over the past two weeks was that huge rally the first day of the year. With the Dow 30 higher by a whopping 308.41 and the S&P ahead by 36.23, many may have remembered the old adage that “As January goes, so goes the year.” Problem is, January isn’t over and since those sharp gains the S&P has only added a tiny .65%, the Dow .56%, the NASDAQ Composite .42%, and the Value Line 1.2%.

 

3/2009

5/2011

%Gain

Last

From 3/2009

5/2011 to date

S&P 500

666.79

1370.58

+105.5%

1472.05

+120.7%

+7.4%

Dow 30

6469.95

12876.00

+99.0%

13488.43

+108.4%

+4.8%

NASDAQ

1265.52

2887.75

+128.2%

3125.64

+146.9%

+8.2%

Value Line

992.45

3149.52

+217.3%

3289.89

+231.0%

+4.3%

There are also some other exceptions to keep in mind. In the table above notice that of the four major indexes we follow, the Value Line index gained the most from March 2009 until May 2011, the vicinity within which ALL of our key market indicators including MAAD, CPFL, Cumulative Volume, and Momentum peaked out. And then notice that since May 2011 ALL of those same indexes have been limited to single digit returns. In other words, from March 2009 through early May 2011, the market took nearly 26 months to accrue its gains. And then from May 2011 to date, after nearly 22 months those same indexes have only been able to add from about 2% to a little less 6% of the gains made from March 2009 to May 2011. Notice also that despite the new all-time high in the Value Line index within the past two weeks, the VAY is the worst performer of the major four since May 2011.

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