Stocks gain, but key technical highs remain selective

Weekly Review: MAAD, CPFL indicator analysis

McCurtain Most Actives Advance/Decline Line (MAAD)

Despite new short and intermediate-term highs and best level in S&P 500 since December 2007, Daily MAAD not only failed to confirm a new short-term high last week, but also remains well below an intermediate resistance peak created back on March 20. Put another way, Daily MAAD has confirmed NONE of the S&P advance for the better part of the past three weeks including the huge rally on January 2. While admittedly it wouldn’t take much buying to better that December 20 near-term MAAD resistance high, it will take more than a short-term flurry to overcome intermediate-term MAAD resistance created back on March 20.

These variances in MAAD relative to S&P, or “the” market, continue to underscore the fact that since late April/early May 2011 the quality of buying has experienced noticeable deterioration. The fact that prices have been unable to gain much traction for the better part of the past two years, while MAAD has remained pessimistic, does not leave us particularly optimistic about the market’s longer-term prospects.

daily, maad

weekly, maad

McCurtain Call/Put Dollar Value Flow Line (CPFL)

CPFL rallied to a new short-term high and its best levels since the November lows last week, but the indicator has yet to overcome intermediate-term resistance created back on September 24. While the Weekly CPFL Ratio remains near “Neutral” (.96), the Daily CPFL Ratio could act as a near-term drag now that it is “Overbought” (2.11). In any case, the indicator has only recovered about 50% of its losses since the spring of 2011 and is nowhere near overcoming major resistance put in place the week ending February 25, 2011.

Near-term buying in CPFL on a Dollar Value basis has moved the indicator higher since the November lows and has kept CPFL in a shallow uptrend over the past year. But what is more evident is that while options buyers have demonstrated some enthusiasm of late, that eagerness has not equaled the buying levels in previous uptrends.

daily, cpfl

weekly, cpfl

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