Stock Market -- Weekly

Fundamentals
As discussed back on 3/23, my Weekly Cyclical Fundamental Indicator (WCFI) began to lose
positive momentum in March after rallying steadily since late 2011. This trend continued into
early April to be followed by a decline this week on an unexpectedly large increase in initial
unemployment insurance claims. So the WCFI uptrend has been broken. The coincident economic
component of the indicator has held up alright, but the forward looking elements -- industrial
commodities prices and unemployment insurance claims --  have run out of gas. Since I smooth the
claims data as do most folks who use it, The WCFI may remain suppressed for a few weeks.

Fed Bank Credit and the adjusted monetary base remain at or near levels seen at mid - year
2011. Monetary Base

The short run flat / weakish WCFI and the absence of QE may prove challenging to market
players who have relished strong positive momentum in both short run fundamentals and
monetary accomodation since the cyclical bull market began. The modest but progressive
improvement in private sector credit demand has yet to capture investor favor whose sense
of confidence has been rooted in Fed QE and positive cycle pressure gauge readings.

Technical
The strong uptrend evident in the weekly SPX price chart and in related indicators was
fractured this week. It had been "hit or miss" whether the SPX could squeeze out a bit more
upside here in April, and this week's sell off did damage. There are few saving graces on
the chart. The SPX did not break below its 13 wk. m/a, MACD although teetering did not
reverse and my 40 wk. price oscillator (not shown) fell to support. The chart has not reversed,
but it is getting ugly. SPX Weekly

Conclusion
Advanced cyclical bull markets run on credit driven and not monetary liquidity and can also
excuse a week or two of sloppy economic data. This behavoir marks confidence. We have
yet to see that in this cycle. Ditto Europe.