Unfocused, frenetic stock market closes little changed on week

Weekly Review: MAAD & CPFL Report

 

Market Snapshot:
 

Last

Week Chg

Week %Chg

S&P 500 Index

1838.70

-3.67

-.19%

Dow Jones Industrials

16458.56

+21.51

+.13%

NASDAQ Composite

4197.58

+22.91

+.54%

Value Line Index

4381.01

+.40

00%

Russell 2000

1168.43

+3.90

+.33%

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

If there was five days of trading in which the words “schizophrenic” and “frenetic” could be combined to measure market action, last week was it. On Monday, a 23.17 point loss in the S&P and 179.11 points of negativity in the Dow 30 suggested the bloom had been knocked off the short-term rose. Nope. Tuesday a sharp rebound developed and Wednesday four of the five majors tapped out more new highs along with our Daily Most Actives Advance/Decline Line (MAAD). But Weekly MAAD was flat. And despite the fact that our Call/Put Dollar Value Flow Line (CPFL) rallied Friday back above key resistance made last June 11 and to its best level since August 8, 2011, Momentum on the Minor, Intermediate, and Major Cycles has confirmed none of the market’s recent strength to new highs.

 

Long-term upside “Measured Move” Targets as calculated from March 2009 bear market lows

 

Recent High

Target

Diff 1-17-14

S&P 500

1850.84

1778

+4.09%

Dow 30

16588.25

16810

-1.31%

NASDAQ Comp.

4215.19

4025

+4.72%

Value Line

4404.15

4410

-.13%

Russell 2000

1169.82

1160

+.84%

                                                                                                    Average above target: +1.64%

And then at week’s end, all of the major indexes we follow were positive, except the S&P 500 that was down fractionally. But the S&P actually closed at a new high, confirmed by Cumulative Volume (CV), last Wednesday by .02 before fading into Friday’s close. And while the Dow 30 was actually a bit higher on the week, the blue chip index remains marginally below a new high made back on December 31. The NASDAQ Composite, Value Line, and Russell 2000 indexes all made new highs last week, but VALUA was unchanged over five days.

Market Overview – What We Know:

  • Confined to narrow closing levels relative to previous week, major indexes were mixed last week. Despite a new closing high, S&P 500 was down slightly over five days. Dow 30 was up, but failed to better December 31 high. NASDAQ Composite, Value Line, and Russell 2000 indexes all closed at new highs last week, but were mixed by Friday.
  • Weekly market volume declined 2%.
  • Despite flirtation with short-term negativity early last week. S&P 500 remains positive on all Cycles including Minor, Intermediate, and Major. To turn short-term trend negative, bellwether must sink below lower edge of 10-Day price Channel (1827.71 through Monday). Intermediate Cycle remains positive until lower edge of 10-Week Price Channel is penetrated (1770.00 through January 24).
  • Our daily VIX-based volatility indicator, VBVI, remained in lower reaches of “Overbought” territory last Friday (84.85%), while larger Intermediate Cycle reading increased to “Overbought” at 96.21%.
  • Daily MAAD rallied to new high and best level since March 2009 last Wednesday, then faded into Friday close. Weekly MAAD was unchanged after hitting new high week ending January 10. On week 10 issues were positive and 10 were negative. Weekly MAAD Ratio was moderately “Overbought” at 1.55.
  • Daily CPFL rallied to new short-term high last Friday, above resistance made June 11, 2013, and to best level since August 8, 2011. On week, CPFL was positive by 4.02 to 1 with Weekly CPFL Ratio moderately “Overbought” at 1.72.

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