Stock market posts weekly loss; intermediate cycle at risk

Weekly Review: MAAD & CPFL Analysis

Since the price highs of May 2013 that coincided generally with the highs in all of our key indicators, the S&P 500 has tacked on a little over 13%. Not bad compared to CD rates at the neighborhood bank, but still nowhere near the 106% gain the S&P added from March 2009 to that May 2011 high. In that same time frame the Dow 30 has added 15%, the NASDAQ Composite and the Value Line index 13% each. The first leg up in the market took two years and the time frame since May 2011 has used up another two years. So, considering the extent of gains during the first leg compared to the percentage gain of the advance since then that developed in the face of negative indicator divergences, is it likely to expect this market will continue higher indefinitely?

Daily S & P 500 with Cumulative Volume (CV)

Weekly S & P 500 with Cumulative Volume (CV)

Probably not.

Last week put a small crack in the surface of at least the short-term trend. Not a big one, but enough to suggest a Minor Cycle negative in the NASDAQ Composite and the Value Line index with the S&P and the Dow 30 trotting closely behind and in contention for follow-up negative confirmations. If the short-term trend in effect since February 26 gains some downside legs, we could see a threat to the larger Intermediate Cycle that has been underway since the November lows. Further weakness there and then the major trend comes into focus.

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