Market Pulse
Author: Created: 3/10/2010 11:54 AM
Market Pulse
By Walter Murphy on 11/29/2010 3:13 PM
While the weekly Coppock Curve nominally still has a bullish bias for the S&P 500, it has taken on a bearish bias for seven of the 10 S&P economic sectors.  One of the three exceptions happens to be Information Technology, which is the largest sector of them all.  So, taken from the perspective of the market as a whole, it seems that the post-August – if not the larger post-July – uptrend is skating on increasingly thin ice.  With that in mind, we will keep an eye on 1177-1173 during the coming week.  A violation of this support range would not only represent a breakdown from the recent trading range, but would also represent a violation of the dominant support trend line.  Conversely, a rally through 1200-1201 would be a short term breakout.

S&P 500

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By Walter Murphy on 11/18/2010 1:28 PM

We put out a press release today.  You can read it here:

http://finance.yahoo.com/news/Walter-Murphy-of-Walter-iw-1228104671.html?x=0&.v=1

By Walter Murphy on 11/18/2010 1:13 PM
On Wednesday, the S&P 500 only gained 0.02%, but that was enough break a four day losing streak.  Breadth was positive by more than 7:5 but the up/down volume ratio was negative by 7:6.  Total volume fell by 29% and dropped back below its 21-day ma.  The daily Coppock Curve has a bearish bias for all 24 S&P industry groups and for 21 of the 30 stocks in the DJIA.

Wednesday was an inside day with both a lower high and a higher low than those seen on Tuesday.  Such days often signal indecision and/or the need for some rest.  The latter seems likely after two 90% down days in the prior three trading sessions.  But, while the S&P and other indexes were resting, moving averages were headed lower.  Indeed, the 5-day exponential moving average moved below its 21-day counterpart for the first time since just after the August lows.  At the same time, the daily Coppock Curve fell to a two-month low – but is still on the overbought side of neutral.  And to top it off, the Investors Intelligence percent bulls surged...
By Walter Murphy on 11/17/2010 4:41 PM
On Tuesday, the S&P 500 experienced its fourth consecutive decline – and sixth in the past seven days.  The 1.6% loss was the largest setback in almost three months.  Tuesday was also the second 90% down day in three sessions as breadth was negative by over 12:1 and the up/down volume ratio was negative by almost 16:1.  These broad-based negatives were exacerbated by a 46% increase in total volume.  The daily Coppock Curve has a bearish bias all 24 S&P industry groups and for 20 of the 30 stocks in the DJIA.

The uptrend from the October 4 low has been reversed.  However, it is increasingly likely that the larger rally from the late August low – and perhaps even from July’s low – has been reversed.  The weekly Coppock Curve is hanging on to its uptrend, but the pressures from the daily oscillator, which we expect to remain in force through much of the balance of November, may be too much to withstand.  In addition, more common stocks made new 52-week lows than those that made new highs; that last happened...
By Walter Murphy on 11/13/2010 9:18 AM
On Thursday, the S&P 500 experienced its third loss in four days with a decline of 0.4%.  Breadth was negative by an 8:5 margin, while down volume exceeded up volume by a slightly more robust 5:3 ratio.  Total volume, which was impacted by a semi-holiday environment, was 16% lower than Wednesday’s turnover.  The daily Coppock Curve is negative for 14 of the 24 S&P industry groups, but is positive for 16 of the 30 stocks in the DJIA.

Stocks and gold were down, the dollar was up, and bonds were on holiday.  However, there were no meaningful changes to the various trends or the various indicators.  For us, perhaps the biggest news of the day was the AAII’s release of its weekly sentiment survey.  The bulls were at their highest level since January 2007; two weeks ago, the bears were at their lowest level in almost five years.  And, by one measure, the five-week bull/bear ratio is at its most overbought reading since early 1998.  It appears that small investors are “all in;” from a contrary point of view, this...
By Walter Murphy on 11/11/2010 5:35 PM
On Wednesday, the S&P 500 avoided its first three-day losing streak since late September with a rally of 0.4%.   Breadth was positive by a 13:5 margin, while up volume exceeded down volume by a more modest 7:3 ratio.  Total volume was 6% lower than Tuesday’s turnover.  The daily Coppock Curve is still bullish for 14 of the 24 S&P industry groups, but is negative for 16 of the 30 stocks in the DJIA.

It is possible to argue that the S&P experienced a bullish reversal on Wednesday.  At one point during the first hour of trading, the index was 0.7% below Tuesday’s close, but managed to finish on the plus side by closing very near the day’s high.  This, plus a very oversold hourly momentum condition and a still bullish point-and-figure pattern, implies higher highs in the hours, if not the days, immediately ahead.  As for resistance, the index will have to contend with important Fibonacci relationships in the 1229-1249 range.  Nearby support is at 1205-1204, then 1196 and below.

US Long Bond

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By Walter Murphy on 11/10/2010 3:27 PM
On Tuesday, the S&P 500 posted its second consecutive loss with a decline of 0.8%.  Both breadth and the up/down volume ratio was negative by more than 4:1.  Total volume was 21% higher than Monday’s turnover.  The daily Coppock Curve is still bullish for 14 of the 24 S&P industry groups, but is negative for 17 of the 30 stocks in the DJIA.

In recent weeks, we have been pointing out that some important sentiment indicators – such as the AAII bull/bear ratio and (to a lesser degree) our own sentiment index – were overbought.  Thus, it seemed that, from a contrary point of view, this evidence of excess optimism was a potentially important negative development for the current rally.  However, even though these intermediate sentiment indicators were overbought, the 10-day CBOE put/call ratio was steadfast in its refusal to move out of neutral territory – until today.  In yesterday’s Short Term Review, we mentioned that the put/call ratio was at its most overbought level since April.  Today, it moved even lower...
By Walter Murphy on 11/4/2010 12:25 PM
On Wednesday, the S&P 500 posted its third straight gain with a rally of 0.4%.  Winners outpaced losers by 5:4 and the up/down volume ratio was positive by a more robust 7:4 margin.  Total volume was 21% higher than Tuesday’s turnover.  The daily Coppock Curve is bullish for 14 of the 24 S&P industry groups; within the DJIA, the oscillator is positive for 15 of the 30 stocks.

The S&P is near an important juncture.  We have made the case that the early October reversal was an important dividing line.  That reversal effectively marked the end of the rally from late August to early October while, at the same time, signaling the beginning of a brand new rally pattern from October 4 on.  As such, our sense has been that the rally since October 4 should have a Fibonacci relationship with the prior rally from August 27 to September 27-30.  With that in mind, the current rally will be .618 of the early uptrend at 1200-1204.

S&P Hourly

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By Walter Murphy on 10/29/2010 12:57 PM
On Thursday, the S&P 500 posted its sixth gain in five day with a rally of 0.1%.  Nonetheless, losers outpaced winners by 8:7 and the up/down volume ratio was negative by a 7:6 margin.  Total volume fell by 3% and remains below its 21-day ma.  The daily Coppock Curve is bearish for 19 of the 24 S&P industry groups and 22 of the 30 stocks in the DJIA.

Since October 13, the “500” has been locked in a tight range.  How tight?  Using hourly closing data as a basis, the S&P has spent most of its time since October 13 trading between 1187 and 1166.  In those 12 trading days (84 trading hours), the index has managed only nine hours outside of the range; seven hours were above, and two were below.

S&P Hourly

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By Walter Murphy on 10/28/2010 2:56 PM
On Wednesday, the S&P 500 broke a five-day winning streak with a loss of 0.3%.  Winners outpaced losers by almost 5:2 while the up/down volume ratio was negative by a more modest 8:5 margin.  Total volume increased by 3% but is below its 21-day ma.  The daily Coppock Curve is bearish for 19 of the 24 S&P industry groups and 21 of the 30 stocks in the DJIA.

The daily Coppock Curves for both the S&P and DJIA hit new reaction lows on Wednesday.  Both peaked in late September, which suggests that the rally from the October 4 low is an extension of the older uptrend from the late August low.  An extension, plus the fact that the deteriorating Coppocks are still in overbought territory, suggests that the short term technical condition is increasingly fragile.  The deteriorating McClellan Summation Index, an overdue 20-week cycle top, and increasingly overbought sentiment attest to that fragility.

30-Year Yields

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