Market Pulse
Author: Created: 3/10/2010 11:54 AM
Market Pulse
By Walter Murphy on 8/29/2012 1:32 PM
Tuesday was mixed. The S&P 500 declined by less than 0.1%, which was its fifth setback in seven days. Advancing stocks exceeded losers by 5:4, but the up/down volume ratio was bearish by a similar margin. Turnover increased (by 5%) for the first time in five days. The daily Coppock Curve has a bearish bias for 20 of the 24 S&P industry groups and for 25 of the 30 DJIA stocks.

The MSCI All-Country Index recorded its fifth straight decline with a loss of 0.2%. The Coppock Curve has a bearish bias for 34 of the 35 non-US markets that we follow on a daily basis.

Much of the commentary on Tuesday had to do with the fact that the Case-Shiller house price index was quite good while the Conference Board’s measure of consumer confidence was quite poor. The rationale was that these reports contributed to the market’s mixed performance.

The fact is that the S&P is a leading indicator, while the other two are not. Moreover, house prices and consumer confidence have not correlated particularly well with...
By Walter Murphy on 8/27/2012 3:54 PM
“Plain English”

Stocks: We believe that higher rally highs are likely, despite the fact that there are more bearish divergences than Heinz has pickles.

Rest of the World: Eight of the 37 global equity markets in our weekly review recently made new 52-week highs. Overall, 19 are within 5.0% of their respective highs. Since the weekly Coppock oscillator is positioned to maintain a bullish bias into late September or early October, the list of highs will likely expand in the weeks ahead.

Interest Rates: The US/German yield spread is below its May peak, which could be a sign that the spread’s trend is fatigued. In turn, that would be an inter-market confirmation that the S&P’s 2009-2012 “D” wave is in its latter stages.

Commodities: Silver’s daily Coppock Curve has broken out and the weekly oscillator has a bullish bias that is positioned to last for the next 9-11 weeks. Moreover, sentiment is still oversold. This combination suggests a Fibonacci retracement of the entire consolidation...
By Walter Murphy on 8/23/2012 7:10 AM
On Tuesday, the S&P 500 started out the day by rallying to a new 2009-2012 bull market high but then reversed and broke down below Monday’s low, finishing with a 0.3% loss. Declining stocks exceeded winners by 6:5 and the up/down volume ratio was bearish by only a very small margin. Turnover increased by 18%. On the surface, this qualifies as a distribution day, but most of the volume occurred in the first 90 minutes and the last 30 when the market was rallying. Nonetheless, the daily Coppock Curve now has a bearish bias for 14 of the 24 S&P industry groups and for 20 of the 30 DJIA stocks.

The MSCI All-Country Index rallied by 0.3%. Even so, the Coppock Curve has a bearish bias for a 27 of the 35 non-US markets that we follow on a daily basis.

We have previously made the case that the count for our 2009-2012 “D” wave was not complete and that the S&P would likely exceed April’s 1422 peak. The index rallied to as high as 1427 on Tuesday, so it does not “need” to go any higher. The minimum objectives...
By Walter Murphy on 8/20/2012 1:59 PM
“Plain English”

Stocks: We would not be surprised to see the daily oscillator turn down this week, signaling that the rally of recent weeks is ready to take a much-deserved rest.

Rest of the World: The combination of uptrending markets, constructive momentum, and new breadth highs indicates still higher equity prices in the weeks ahead.

Interest Rates: The daily Coppock Curve for US yields is at confirming “good overbought” readings, the weekly oscillator is positioned to remain constructive for the next two months or so, and the monthly indicator is bottoming. This combination of trends suggests still higher highs.

Commodities: We expect that a coming pullback for oil will prove to be an interruption (but not a reversal) of the larger intermediate uptrend from the June low.

US Dollar: Our weekly currency cumulative advance decline line is on the verge of breaking down and the greenback’s weekly Coppock oscillator is deteriorating versus both the index and a majority of the currency...
By Walter Murphy on 8/17/2012 2:26 PM
On Wednesday, the S&P 500 followed Tuesday’s paltry 0.05% gain with an even smaller 0.04% advance. However, unlike Tuesday when breadth was marginally negative, it was solidly positive on Wednesday. Nonetheless, volume continues to be lackluster; turnover fell 9% to its third-lowest level of the year (the second lowest level was on Monday). In this low volume environment, momentum is likely to begin to put some pressure on the market. The daily Coppock Curve now only has a bullish bias for 12 of the 24 S&P industry groups and we expect a bearish bias for most groups in the next day or two. The oscillator already has a bearish bias for a majority of the 30 DJIA stocks.

The MSCI All-Country Index fell 0.1%. The Coppock Curve now also has a bearish bias for a majority of the 35 non-US markets that we follow on a daily basis.

In yesterday’s blog we failed to note that this week is the 30th anniversary of the kick-off of the great 18-year (1982-2000) secular bull market. By that measure, the current secular...
By Walter Murphy on 8/15/2012 2:34 PM
On Tuesday, the S&P 500 gained less than 0.1%. Even so, it was the index’s seventh gain in eight days. However, declining stocks managed to exceed winners by a (very) small margin and the up/down volume ratio was bearish by a 9:8 margin. Turnover increased by 17% but is still well below its 21-dma. The daily Coppock Curve still has a bullish bias for 15 of the 24 S&P industry groups and for 16 of the 30 DJIA stocks.

The MSCI All-Country Index rallied by a bit more than 0.1%. Like the S&P, this was its seventh gain in eight days. While the Coppock Curve currently has a bullish bias for 25 of the 35 non-US markets that we follow on a daily basis, we would not be surprised to see most markets take on a short term bearish bias by the end of the week.

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By Walter Murphy on 8/13/2012 9:59 AM
“Plain English”

Stocks: A near term pullback should be just that – and short term reaction within a larger intermediate uptrend. Even so, the S&P’s underpinnings are not one-sidedly bullish.

Rest of the World: The weekly Coppock Curve for the MSCI All Country Index has a bullish bias that is positioned to remain in force for another 6-9 weeks. Thus, a near term pullback will likely prove to be a reaction within in a still-developing uptrend.

Interest Rates: We expect that the weekly Coppock indicator will have a bullish bias for all six countries in our global index by the end of the month. Thus, the anticipated move to higher yields in the US should prove to be part of a broad-based global event.

Commodities: Last week’s rally by oil – which is part of a larger intermediate uptrend from its June low – augers well for the equity indexes.

US Dollar: Internally, the dollar index is weak. Our weekly cumulative advance-decline line is on the verge of breaking down and the greenback’s...
By Walter Murphy on 8/7/2012 8:06 AM
“Plain English”

US Equities: Our preferred Elliott Wave count is not complete. Moreover, both the weekly and monthly Coppock Curves are currently constructive. And, importantly, August has a positive seasonal bias both historically (since 1928) and since the 2000 secular peak.

The Rest of the World: At the end of June, the monthly Coppock oscillator had a bearish bias for 26 of our 37 markets while only seven (19%) were “oversold and improving.” However, at the end of July, 22 (59%) oscillators were characterized as “oversold and improving.” The last time this constructive condition was met was April 2009.

Yields: Since uptrends in the monthly Coppock Curve have tended to persist for 12-14 months, a third quarter 2012 low in global yields will be expected to result in an uptrend that should persist until at least late 2013 and arguably into 2014. Thus, the anticipated rally in US yields should be part of a broad-based global rally.

US Dollar: The dollar index tends to experience 2-4...
By Walter Murphy on 8/2/2012 3:04 PM
On Wednesday, the S&P 500 recorded its third straight decline (and seventh in the past nine days) with a loss of 0.3%. Declining stocks exceeded winners by 11:4 while the up/down volume ratio was bearish by a more modest 2:1 margin. Turnover increased by 15%. The daily Coppock Curve still has a bullish bias for 14\3 of the 24 S&P industry groups. However, the oscillator has a bullish bias for 21 of the 30 DJIA stocks.

The MSCI All-Country Index fell 0.2% for its second straight decline. The Coppock Curve has a bullish bias for 28 of the 35 non-US markets that we follow on a daily basis.

The S&P 500’s nominal uptrend from the early June low remains intact. In addition, even the hourly point-and-figure chart is on a “buy.” Thus, the potential for higher post-June highs is still intact.

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By Walter Murphy on 7/30/2012 1:55 PM
“Plain English”

Stocks: While the expected trend change for the S&P seems to have occurred pretty much on schedule, the underpinnings of the trend change have been more difficult to grasp than has been the case for the other asset classes.

Interest Rates: Food commodities were weaker than they have been in some time. As a result, DBA (PowerShares DB Agriculture Fund) recorded its first decline in six weeks. This may be the start of a short term correction since near term momentum is deteriorating and the index appears to be at or near the end of a five wave rally.

Commodities: The weekly Coppock has a bullish bias for both the CCI and most of the 12 individual commodities that we regularly monitor. Moreover, the recent rally by the CCI was enough to reverse the decline from this past February’s high.

US Dollar: Last week the euro gained 1.3% versus the US dollar. We highlight this for two reasons. First it was the euro’s best performance in five month’s. Second, this rally could be...
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