Market Pulse
Author: Created: 3/10/2010 11:54 AM
Market Pulse
By Walter Murphy on 3/26/2010 12:29 PM
On Thursday, the S&P 500 experienced what might prove to be a reversal day.  The index opened strong and rallied to a new intra-day recovery high above 1180, but a poor final hour erased all of that and then some.  The index moved below Wednesday’s low and finished with a net loss of 0.2%.  Breadth was negative by a 9:5 margin and down volume outpaced up volume by a more modest 8:7 ratio.  However, total volume expanded by 20%, which adds further evidence to the potential reversal day.  Finally, the daily Coppock Curve is negative for 23 of the 24 S&P industry groups.

By itself, Thursday’s action was “no harm, no foul” (yes I will head for college basketball once this is sent out).  The uptrend line from the February low is still intact and a case can be made that potential objectives above 1200 are still out there.  Moreover, short term momentum (i.e., the daily Coppock Curve) has decisively turned down (finally!) from overbought conditions.  So it would seem that the index could be under pressure in the days and weeks ahead.

By Walter Murphy on 3/17/2010 7:06 AM
In yesterday’s Breakfast with Dave, noted economist (and friend) David Rosenberg stated that we looked to be “throwing in the towel, acknowledging recently that the technical picture has improved and this is key for a market more driven by technicals than fundamentals, valuation, or fund flows.”  Our guess is that if Dave feels that way, so do others.  So let’s make one thing clear: the towel is still on the shelf.  We still regard the 2009-2010 uptrend as a bear market rally.  That said, several observations are warranted.

1. The market eventually trades to the fundamentals, but the technicals lead the fundamentals.  So, in that regard, the market is usually driven more by the technicals than by fundamentals or fund flows.  This is not new.  The Japanese were engaged in technical analysis before Keynes was a gleam in his parents’ eyes.  That said, the nearby chart is of interest.  The top half is the four-quarter rate of change for the GDP; the bottom half is the four-quarter rate of change for the S&P. ...
By Walter Murphy on 3/11/2010 8:20 PM
On Thursday, the S&P 500 rallied 0.4%.  It was the index’s third straight gain, and ninth in 10 days.  It was also a new closing high for the 12-month uptrend.  Breadth was positive by a 3:2 margin and up volume outpaced down volume by better than 3:1.  Total volume fell by 13%, but remains above its 21-day ma.  The daily Coppock Curve is negative for 15 of the 24 S&P industry groups.

The S&P exceeded January’s hourly and closing high by 0.01 points – a penny.  What does that mean?  Not much In the broad scheme of things.  Most of the popular averages have already exceeded their respective January highs.  The DJIA is the most notable exception and even the S&P itself is still below January’s intraday high (1150.45).  So, in a sense, the the “500” is catching up.

Market Pulse
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