Stock market dance can linger even after music stops

Weekly Review: MAAD, CPFL indicator analysis

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


Market Snapshot:


Week Chg

Week %Chg

S&P 500 Index




Dow Jones Industrials




NASDAQ Composite




Value Line Arithmetic Index




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

It is the seminal events in the financial markets that provide fodder for discussion in the history books. That which followed the stock market peak in September 1929 was epic in proportions. Financial disaster, the Great Depression, and then World War II all made their appearance. The Crash of 1987 shook the financial world. Two decades later the bear market of 2008/2009 wiped out trillions in assets. Some would argue the economies of the world have yet to fully recover from that downturn, despite equity price recovery over the past four years.

There have been other watershed moments logged onto the financial calendar. In September 1981 interest rates reached historic highs. At that point it was possible to buy a 30-year Treasury Bond yielding upwards of 15%. Many of those issues matured within the past several years. Not bad for government work! And then there was the precious metals market that made an historic low in the spring of 2001 with gold and silver becoming the best performers of the new decade.


Market Overview – What We Know:

  • Strong gains were registered by major indexes last week. S&P 500, Dow 30, and Value Line index rallied to new short to intermediate highs with VAY to new all-time closing high. NASDAQ Composite gained, but was weakest of four majors.
  • All cycles, including Minor, Intermediate, and Major, remain positive.
  • Market volume declined 19% compared to previous week, but that was because of truncated 4-day trading week. Otherwise volume would have likely been up a bit.
  • To suggest short-term negative, S&P 500 must sell below lower edge of 10-Day Price Channel (1467.39 through Monday). Intermediate Cycle remains positive until S&P declines below lower edge of 10-Week Price Channel (1393.45 through February 1).
  • Daily MAAD moved to new short-term high last week, but remains well below more important intermediate resistance made nearly year ago on March 20. Weekly MAAD has moved above resistance created last September, but remains below resistance created in March 2012 and in late April 2011, let alone a long-term downtrend line stretching back to 1999 when indicator peaked in front of highs of early 2000.
  • Daily MAAD Ratio was last just above “Neutral” at 1.16 with Weekly MAAD Ratio “Overbought” at 1.63.
  • Daily CPFL hit new short-term high last week, but has yet to overcome resistance created last September. Daily CPFL Ratio was moderately “Overbought” at 1.66 while the Weekly Ratio was moderately overheated at 1.91.
  • Cumulative Volume (CV) confirmed S&P 500 strength last week to a new intermediate high, but did not confirm gains in S&P 500 Emini, Dow 30, or NASDAQ Composite.

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