Stock market minor cycle negative; intermediate status looms

Weekly Review: MAAD & CPFL Analysis

But there’s a bigger problem underscoring the “fully invested” approach to the market. Although it’s true the major indexes have all made new highs or new all-time closing highs, the only absolute commonality they have all had is that they have been moving in the same direction, up on the rallies and down during the corrections. Same can be said for all of our key indicators, but there the similarities end. In fact, NONE of our indicators has demonstrated notable improvement since May 2011 while continuing to defy the notion price action following those spring 2011 highs was merely another long-term buying opportunity. In other words, we contend that one of the reasons the market has been unable to make remarkable headway on the upside, as was the case following the March 2009 lows, is BECAUSE of those weak market underpinnings.

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

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

Low market volume, failing upside Momentum on the Major Cycle since April 2010 (a phenomenon that can occur about ½ way through a long-term move), decreasing volatility that is now back to levels coincident with Intermediate Cycle highs, weak Cumulative Volume (CV), Most Active Advance/Decline (MAAD) data, and Call/Put Dollar Value (CPFL) data have left a pall hanging over this market. There is also the unmistakable fact the Major Cycle is historically “Overbought.”

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

4/22

4/23

4/24

4/25

4/26

4/26

4/30

S&P 500 Index

BUY 1582.43

BUY 1582.07

BUY 1581.54

BUY 1577.28

BUY 1573.44

SELL 1513.68

SELL 1349.76

Dow Jones Industrials

BUY 14782.57

BUY 14787.00

BUY 14789.13

BUY 14770.56

BUY 14733.98

SELL 14038.80

SELL 12653.67

NASDAQ Composite

BUY 3271.91

BUY 3272.63

BUY 3268.14

BUY 3259.71

BUY 3250.98

SELL 3163.27

SELL 2882.50

Value Line Index

BUY 3535.13

BUY 3528.46

BUY 3522.30

BUY 3507.84

BUY 3495.71

SELL 3409.09

SELL 2859.75

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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