Stock market weakness is crack in bullish armor

Weekly Review: MAAD & CPFL Report

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

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

While bull market tops are notoriously more difficult to pick than bottoms, the bull trend that began in March 2009 has three things that are not now working in its favor – volume, Momentum, and time elapsed.

In the first instance and one we have referred to before, Cumulative Volume (CV) has been noticeably absent on all cycles for nearly one half of the uptrend since March 2009. Those numbers have been reflected to some extent in our Most Actives Advance/Decline Line (MAAD) and our Call/Put Dollar Value Flow Line (CPFL). While these indicators have been in synch with index pricing up and down over the past four years, the extent to which they have moved has been the issue. All, including Momentum, were in synch with prices off of the March 2009 lows. But after the spring 2011 highs that coincidence changed. Since then NONE have made new highs. The S&P 500 rallied 106% from March 2009 to May 2011. From May 2011 to date the index rallied just over 10%.

Index Daily Price Channel Stops (10-Bar MAs of Lows) Weekly Monthly
 

2/25

2/26

2/27

2/28

3/1

3/1

3/31

S&P 500 Index

BUY 1520.69

BUY 1522.96

BUY 1524.91

BUY 1523.11

BUY 1522.00

SELL 1433.37

SELL 1347.47

Dow Jones Industrials

BUY 14008.63

BUY 14015.34

BUY 14023.86

BUY 14007.79

BUY 14006.29

SELL 13205.69

SELL 12675.84

NASDAQ Composite

BUY 3196.13

BUY 3200.51

BUY 3204.02

BUY 3196.35

BUY 3190.23

SELL 3025.51

SELL 2890.17

Value Line Index

BUY 3438.54

BUY 3447.16

BUY 3454.54

BUY 3449.15

BUY 3444.22

SELL 3177.23

SELL 2852.92

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.

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