Market Pulse
Author: Created: 3/10/2010 11:54 AM
Market Pulse
By Walter Murphy on 8/30/2011 6:04 PM
On Monday, the S&P posted its fifth gain in six days with a rally of 2.8%. Advancing stocks overwhelmed losers by better than 33:1 and the up/down volume ratio was positive by a similarly positive 32:1 margin. However, turnover fell by 15% and remains below its 21-dma. The daily Coppock Curve has a bullish bias for all 24 S&P industry groups and for all 30 stocks in the DJIA.

Today’s rally was the fourth 9:1 up day of the month; when combined with the five 9:1 down days, August has experienced a total of nine 9:1% days. This is by far the greatest such number in the 45 months of composite common stock data at our disposal. An examination of NYSE data for all issues back to 1994 shows that the current month still has the highest number of 90% days on record.

What do all of these 90% days mean? At the least, they speak to the increased volatility that has been in evidence. The fact that there have been five down days and four up days may also speak to a lack of conviction. What is most disconcerting,...
By Walter Murphy on 8/24/2011 6:30 PM
On Tuesday, the S&P rallied 3.4%. While that is a robust gain by any measure, it is only the third strongest day of the month; conversely August has experiences four days that were down by more that 3.4%. Nonetheless we respect the fact that advancing stocks overwhelmed losers by almost 14:1; the up/down volume ratio was positive by a much more modest 4:1 margin. Turnover increased by 9% but is below its 21-dma. The daily Coppock Curve has a bullish bias for all 24 S&P industry groups and for 29 of the 30 stocks in the DJIA.

Yesterday, we got a confirmed upside reversal by the S&P 500’s daily Coppock Curve. This was bolstered by the fact that the oscillator also has a bullish bias for all 24 S&P industry groups. (The stochastic indicator is in a similarly constructive position). However, the weekly indicator has a solid bearish bias and most indicators confirmed the recent low. Thus, it is reasonable to suggest that recent strength is the opening salvo in a relief rally. If so, this rally’s purpose will...
By Walter Murphy on 8/22/2011 12:14 PM
Stocks: Both the S&P mid- and small-cap indexes have declined by more than 20% from their recent highs while the large-cap “500” is still shy of that benchmark. Since many observers define a 20% decline as a bear market, a case can be made that the smaller cap “troops” are leading the large-cap “generals.” The opposite is usually true at important reversals.

The Rest of the World: A review of 34 Dow Jones global indexes shows that 30 recently experienced a “death cross” when the 50-day ema crosses below the 200-day ema. Meanwhile, 15 of the 34 Dow Jones indexes finished the week at least 20% below their 52-week high. Thus, the magnitude of the recently declines, coupled with the broad-based nature of the selling pressure, suggests that it will take a good deal of time for global markets to build a bottom and reverse the post-May downtrend.

10-Year Yields: Despite the fact that the 2008 lows for 10-year yields have yet to be decisively broken, the damage may have already been done. For example, one...
By Walter Murphy on 8/17/2011 10:54 AM
On Tuesday, the S&P broke a three day winning streak with a loss of 1.0%. Both the breadth ratio and the up/down volume ratio were negative by more than 5:1. Turnover was essentially unchanged and has fallen below its 21-dma. However, the daily Coppock Curve now has a bullish bias for 22 of 24 S&P industry groups and for 26 of the 30 stocks in the DJIA.

Yesterday (Monday) was yet another 90% day – in fact, it was the third 90% up day in a week. This, plus the four 90% down days during the past two weeks, means that August has had seven 90% days so far – and the month is barely half over.

A review of the past several years reveals two other periods when there were seven 90% days in a month: October-November 2008 and June 2010. That is not the biggest sample in the world, but we were struck by the fact that neither period marked the low for the downtrend that was then in force. The 2008 example was followed by a decent six-week rally and then a final decline into the important March 2009 low. While...
By Walter Murphy on 8/15/2011 7:47 AM
Stocks: The S&P 500 has effectively reversed the cyclical uptrend from the 2009 low. Moreover, the weakness has been confirmed by many important indicators, e.g., the cumulative a-d line, on-balance volume, and the Bullish Percent Index. This suggests that the index is not yet ready for a sustainable upside reversal.

The Rest of the World: During last week’s turmoil, most of the media focus was on the US and Europe. Little attention was paid to Japan’s Nikkei, which has been testing its March (post-earthquake) low. Although this test took longer than might ordinarily be expected, it is – at least to this point – viewed as normal. We will look for signs of a bottom to help establish the idea that the current test is successful. A week with both a higher high and a higher low – especially if accompanied by signs of an improving Coppock Curve -- would be a step in the right direction.

10-Year Yields: We have consistently (and persistently) referred to the December 2008 low in yields as a potentially...
By Walter Murphy on 8/11/2011 6:46 AM
We are traveling through Thursday. E-mails will be answered. Blogs could be catch as catch can.

Tuesday was the best day for the S&P 500 since March 2009. The index’s 4.7% rally was buttressed by the fact that it was a 90% up day. Advancing stocks exceeded losers by more than 17:1 while the up/down volume ratio was positive by a much more robust 29:1. The biggest fly in the ointment was that turnover fell by 8%; however, volume is still well above its 21-day ma. The daily Coppock Curve has a bearish bias for all 24 S&P industry groups and for 28 of the 30 stocks in the DJIA.

Most of the headlines attribute today’s gains to the release of the Federal Reserve Board’s (Fed) statement that it will keep interest rates at their present low levels for two years. Interestingly enough, the “500” actually declined fairly sharply after the statement’s release. Indeed, it wasn’t until the index hit Fibonacci (Fib) support almost 30 minutes after the statement’s release that the index was able to post the day’s...
By Walter Murphy on 8/9/2011 12:15 PM
We are traveling through Thursday. E-mails will be answered. Blogs could be catch as catch can.

Monday was not a great day to be on a plane. The S&P 500 experienced its worst day since December 2008 with a loss of 6.66%. Breath was overwhelmingly negative as declining stocks exceeded winners by more than 83:1. The up/down volume ratio was negative by more than 80:1. Turnover increased by 13% to its highest level since May of last year. Not surprisingly, the daily Coppock Curve has a bearish bias for all 24 S&P industry groups and for all 30 stocks in the DJIA.

image

In Thursday’s blog we suggested that, if the 2008-2011 trend channel was breached, that would be the death knell for the cyclical bull market. The channel was...
By Walter Murphy on 8/5/2011 12:48 PM
As today’s title suggests, Thursday’s selling pressure was unrelenting. As a result, this will be a longer-than-normal piece as we sort out the implications.

On Thursday, the S&P 500 experienced its worst day in 30 months with a loss of 4.8%, which carried the index decisively through 1233-1219 support. Breath was overwhelming negative as declining stocks exceeded winners by more than 41:1. Volume offered no solace; the up/down volume ratio was negative by more than 87:1 and turnover surged by 31% to 7.5 billion shares. Volume is at its greatest distance above the 21-day ma than at any time since December 2009. Not surprisingly, the daily Coppock Curve has a bearish bias for all 24 S&P industry groups and for all 30 stocks in the DJIA.

image...
By Walter Murphy on 8/3/2011 10:14 AM
Stocks: We have repeatedly described the current cyclical bull market as an Elliott Wave bear market rally and have warned that it will end badly, much like the 2002-2007 cyclical bull market/bear market rally. We remain firmly in that camp. More recently, however, we have been defending this rally, suggesting that the final highs have not been seen. The best is probably behind us, but the rally seems to have more life left in it.

The Rest of the World: When we take a look at emerging markets (via the MSCI Emerging Markets index) versus the larger non-US markets (MSCI EAFE), it is apparent that the smaller markets are holding their own. Indeed, while our daily emerging markets cumulative a-d line is range-bound, it is still near its all-time high.

Yields: Ten-year yields have been in a secular (generational) downtrend since 1981. That trend appears to be bottoming. Our more immediate focus is on the current move to new reaction lows within the intermediate downtrend that has been in force since February....
By Walter Murphy on 7/28/2011 6:57 PM
Wednesday was a nasty day.  The S&P 500 recorded its third straight loss – and third straight distribution day – with a decline of 2.0%, which was its worst performance since May.  Declining stocks overwhelmed winners by better than 15:1 while the up/down volume ratio was negative by an even more robust 16:1 margin.  The resulting 9:1 down day was exacerbated by a 25% increase in turnover.  The daily Coppock Curve has a bearish bias for 23 of the 24 S&P industry groups and for 29 of the 30 stocks in the DJIA.

image

In addition to the fact that the S&P is on a three day losing streak, it is important to note that both volume and declining...
Market Pulse
Copyright 2017 by Walter Murphy Global Advisors, LLC Privacy Statement Terms Of Use