New market highs reached Wednesday: Key indicators and indexes

September 19, 2013 02:28 AM
MAAD & CPFL Review

 

Market Snapshot for session ending 09-18-13
 

Last

Day Change

%Change

S&P 500 Index

1725.52

+20.76

+1.22%

Dow Jones Industrials

15676.94

+147.20

+.95%

NASDAQ Composite

3783.64

+37.94

+1.01%

Value Line Index

4051.90

+44.70

+1.11%

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

* Cycle status is based on S&P 500.

Market Overview – What We Know:

  • All of major indexes rallied to new highs Wednesday. Biggest gainer was S&P 500, up 1.22%.
  • Market volume rose 34.5%.
  • Short-term trend remains positive. S&P must sell below lower edge of 10-Day Price Channel (1661.21 through Thursday) to signal reversal to negative. Intermediate Cycle, as measured by lower edge of 10-Week Price Channel (1653.49 through September 20), remains tentatively positive.
  • Our VIX-based short-term volatility indicator rose to 91% Wednesday from Tuesday’s 88%. Most recent VBVI statistical low was13.6% made on August 30. Into August 5 short-term high VBVI was at 98.3%.
  • Daily MAAD hit another new high Wednesday with 20 issues positive and none negative. Level is best since March 2009. Daily MAAD rallied to new high on September 4 in wake of August price consolidation. Daily MAAD Ratio was “Overbought” at 2.48.
  • Daily CPFL was positive Wednesday by 1.28 to 1, but was only slightly above new short to intermediate low made Monday at lowest level since March 14, 2013. Indicator remains just below long-term uptrend line stretching back to October 2011. Daily CPFL Ratio was last “Neutral” at 1.04.

Market Overview – What We Think:

  • Sharp gains Wednesday again confirmed recent positive direction of MAAD that has been making new highs since September 4 to suggest Smart Money continues to like this market.
  • What is becoming increasing concern is developing “Overbought” readings on near-term. Number of sources including price-based oscillators, MAAD Daily Ratio, and our volatility indicator (VBVI) are overheated on Minor Cycle. And then there is the very poor showing from CPFL that seems to be operating in some other dimension with little call buying evident.
  • What is encouraging about new highs, however, is fact that with all of major indexes and index proxies at new highs, larger Intermediate and Major Cycles have been re-confirmed on upside to underscore bull trend.
  • So long as short-term trend remains intact, possibility remains further gains could follow and that MAAD may be more accurately reflecting Smart Money tendencies than other breadth-based indicators.

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

9/16

9/17

9/18

9/19

9/20

9/20

9/30

S&P 500 Index

SELL 1641.48

SELL 1647.85

SELL 1654.68

SELL 1661.21

SELL 1666.79

SELL 1653.49

SELL 1448.73

Dow Jones Industrials

SELL 14831.98

SELL 14876.16

SELL 14941.21

SELL 15014.66

SELL 15083.99

BUY 15513.08

SELL 13465.21

NASDAQ Composite

SELL 3621.20

SELL 3640.12

SELL 3655.66

SELL 3670.43

SELL 3680.72

SELL 3543.30

SELL 3044.23

Value Line Index

SELL 3836.20

SELL 3853.38

SELL 3873.84

SELL 3891.25

SELL 3905.74

SELL 3839.05

SELL 3180.51

 

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.

Next page: Indicator review

We are also updating the daily chart of both the Call/Put Dollar Value Flow Line (CPFL) and Most Actives Advance/Decline Line (MAAD) indicators every day and providing the most recent raw data so you can begin to plot the indicators on your own (see below). The weekly equity index indicator summary provides longer-term commentary based on these indicators.

The definitions of the indicators along with links to the original stories provide helpful background. Also, Robert describes these indicators in a recent I-Trade show presentation available online.


MAAD daily data for past 30 days*

CPFL daily data for past 30 days

Date

NYSE Adv

NYSE Dec

Date

OEX Call $Volume

OEX Put $Volume

8-7-13

6

14

8-7-13

9659

24102

8-8-13

17

3

8-8-13

10581

23811

8-9-13

11

9

8-9-13

11010

29092

8-12-13

14

6

8-12-13

4664

9241

8-13-13

10

10

8-13-13

13128

13169

8-14-13

11

9

8-14-13

8818

9694

8-15-13

5

14

8-15-13

47197

81059

8-16-13

6

14

8-16-13

16021

68567

8-19-13

3

16

8-19-13

8714

27909

8-20-13

15

4

8-20-13

9335

11902

8-21-13

2

18

8-21-13

8125

54624

8-22-13

17

3

8-22-13

98636

11347

8-23-13

15

4

8-23-13

9071

30977

8-26-13

7

13

8-26-13

12717

65786

8-27-13

0

20

8-27-13

45177

61047

8-28-13

15

4

8-28-13

4443

40268

8-29-13

15

4

8-29-13

16417

63697

8-30-13

7

13

8-30-13

4341

40669

9-3-13

15

5

9-3-13

19151

10760

9-4-13

18

2

9-4-13

16402

44520

9-5-13

18

2

9-5-13

10876

7863

9-6-13

10

8

9-6-13

20113

13375

9-9-13

18

2

9-9-13

14877

16433

9-10-13

15

5

9-10-13

37460

21548

9-11-13

15

5

9-11-13

15050

30730

9-12-13

3

16

9-12-13

16370

23336

9-13-13

14

5

9-13-13

10668

4246

9-16-13

12

7

9-16-13

25807

43346

9-17-13

17

3

9-17-13

17778

10023

9-18-13

20

0

9-18-13

44523

34687

*Note: Unchanged issues are not counted.

About the Author

Robert McCurtain is a technical analyst/market timer, private investor and financial markets consultant based in New York City. He can be reached at traderbob@nyc.rr.com.