Market Pulse
Author: Created: 3/10/2010 11:54 AM
Market Pulse
By Walter Murphy on 11/29/2012 4:30 PM
After two inside days (usually a sign of fatigue or indecision) the S&P 500 had an outside day and closed up 0.8% on Wednesday. Outside up days are often a sign of strength. Advancing stocks exceeded losers by 21:8 while the up/down volume ratio was bullish by a much more robust 4:1 margin. A modest increase in turnover helped confirm that Wednesday was an accumulation day. The daily Coppock Curve has a bullish bias for all 24 S&P industry groups and for all 30 DJIA stocks.

By contrast, the MSCI World (ex US) Index fell 0.2%. The Coppock Curve has a bullish bias for 31 of the 35 markets that we most regularly follow on a daily basis.

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By Walter Murphy on 11/28/2012 4:30 PM
After last week’s five-day winning streak, this week is on a two-day losing streak with Tuesday’s 0.5% decline by the S&P 500. Declining stocks exceeded winners by 9:5 while the up/down volume ratio was bearish by a more robust 9:4 margin. Turnover increased by 15%. However, the daily Coppock Curve still has a bullish bias for 23 of the 24 S&P industry groups and for 25 of the 30 DJIA stocks.

The MSCI World (ex US) Index added all of 0.04%, but that was enough to log the fifth gain in seven days (with both of the losses coming in at less than 0.05%). The Coppock Curve has a bullish bias for 30 of the 35 markets that we most regularly follow on a daily basis.

In our recent STR we highlighted two triggers that would help confirm that last week’s rally had further to go: the Zweig breadth thrust indicator and a potential 20-week cycle low. A breadth thrust occurs when the 10-day ema of the daily NYSE breadth ratio rallied from below 0.40 to above 0.615 within 10 days while the current 20-week cycle...
By Walter Murphy on 11/26/2012 4:37 PM
“Plain English”

US Equities: We respect the idea that this new rally will develop – at best – into a post-June “C” wave. Conversely, it may only be a counter trend rally within a larger, unfinished downtrend from October’s high. Of those two, we slightly favor the more bullish alternative

Global Equities: Even if last week’s rally continues for another week or two, it seems best viewed as an ending pattern rather than the start of a new sustainable uptrend. In that regard, we will look for both near- and medium-term bearish momentum divergences in the weeks ahead.

Interest Rates: Our sense is that the previous yield breakdown is more important than last week’s upside reversal. The reversal appears to be a near term event from oversold conditions. By contrast, intermediate pressures are still very much in evidence.

Commodities: The CCI’s monthly oscillator has a bullish bias and the recent June-September rally can easily be counted as a five wave pattern. Thus, once the current intermediate...
By Walter Murphy on 11/21/2012 3:53 PM
On Tuesday the S&P 500 recorded its third straight gain with a rally of less than 0.1%. Advancing stocks edged out losers by 9:8 and the up/down volume ratio was bullish by a more robust 7:6 margin. Turnover declined (by 5%) for the second day in a row. The daily Coppock Curve has a bullish bias for 19 of the 24 S&P industry groups and for 25 of the 30 DJIA stocks.

The MSCI World (ex US) Index fell 0.01%, but 21 of the 35 non-US markets that we follow on a daily basis finished with a gain. Nonetheless, the Coppock Curve has a bearish bias for 20 of the 35 markets.

The S&P 500 has rallied over 46 points since its recent low. This is already the biggest rally since the October peak. However, the improving daily Coppock Curve is still oversold and the initial rally to Monday’s high can be counted as a five wave pattern. Moreover, there appears to be the potential for a bullish head-and shoulders bottom.

With those constructive elements in place, we will be keeping an eye on 1389-1404 as a potentially...
By Walter Murphy on 11/19/2012 4:10 PM
“Plain English”

US Equities: The market is positioned for what should be its best rally since October’s high. We say that because, while the best rally since October’s high was about 40 S&P points, a minimal 38.2% retracement of the post-October downtrend will approach 50 points.

Global Equities: The post-2007 pattern for China’s Shanghai Composite Index reminds us of Japan’s Nikkei post- 1989 and the US’s NASDAQ since 2000. In that regard, the Shanghai index’s five-year bearish malaise may still be in its early stages.

Interest Rates: Even if 10-year yields break their prior low (set in July), it seems quite unlikely that the weekly Coppock Curve will confirm with a new low of its own. At the same time, the monthly oscillator is already in an uptrend. Thus, the current intermediate decline by yields has the potential to be the prelude to a significant 2013 rally.

Commodities: The rally by natural gas, which is probing its 2010-2012 resistance trend line, is being aided by the improving...
By Walter Murphy on 11/14/2012 4:27 PM
On Tuesday the S&P 500 broke a two-day winning streak with a loss of 0.4%. However, this decline was greater than the gains of the previous two days. Moreover, declining stocks exceeded winners by 2:1 and the up/down volume ratio was bearish by a more robust 19:8 margin. Overall, the October-November downtrend remains intact. The daily Coppock Curve has a bearish bias for 18 of the 24 S&P industry groups and for 20 of the 30 DJIA stocks.

The MSCI World (ex US) Index rallied by less than 0.1%. The Coppock Curve has a bullish bias for 19 of the 35 non-US markets that we follow on a daily basis.

Monday was an inside day, while Tuesday was an outside day (closing down). This is viewed as a day of indecision followed by a bearish reversal. At the same time, the range since Friday can be counted as a triangle, which is a continuation pattern. Finally, the daily Coppock Curve is oversold, but it is at confirming “bad oversold” levels. All of this, plus the fact that the weekly oscillator is on pace to remain...
By Walter Murphy on 11/13/2012 4:19 PM
On Monday the US celebrated Veterans Day. As a result, the market was in semi-holiday mode and turnover was the third lowest of the year. The S&P 500 eked out a 0.01% gain, but declining stocks exceeded winners by 6:5 and the up/down volume ratio was bearish by a more robust 5:4 margin. The daily Coppock Curve has a bearish bias for 18 of the 24 S&P industry groups and for 19 of the 30 DJIA stocks.

The MSCI World (ex US) Index lost 0.3%. The Coppock Curve has a bullish bias for 22 of the 35 non-US markets that we follow on a daily basis.

On a short term basis, the decline of the last few days (since November 6) is linear in nature. So, as things stand now, a rally back through today’s high (1384.97) would begin to penetrate downtrend lines and indicate that a low was in place. Further strength through 1391-1392 would help to seal the deal. This, plus the fact that there are short term momentum divergences and the daily Coppock Curve is attempting to bottom, suggests that the S&P is moving into position...
By Walter Murphy on 11/11/2012 4:31 PM
“Plain English”

US Equities: Momentum, cycles, and sentiment are important indicators. But, in the final analysis, they are environmental or conditional tools. Price is the final arbiter. In that regard, it is clear to us that the overall pattern from the 2009 lows is corrective or counter trend from an Elliott Wave perspective.

The Rest of the World: October’s broad based rally allowed our global cumulative advance-decline line to record another all-time high. A new high in breadth is typically a sign that the major trend will remain constructive in the months ahead. This is bolstered by the fact that the monthly oscillator is positioned to be bullish for most markets into 2013’s second quarter.

Yields: We often point out that yields are highly correlated with the S&P 500. So it comes as no surprise that, just as the weekly Coppock Curve for the S&P is deteriorating even as its monthly indicator is improving, the same can be said for the same oscillators for yields.

US Dollar: The...
By Walter Murphy on 11/8/2012 4:18 PM
On Wednesday, the S&P 500 fell by 2.4%. This was the largest decline since the early June low. Declining stocks exceeded winners by more than 11:1 while the up/down volume ratio was bearish by almost 10:1. The result was the first 90% down day since June. The daily Coppock Curve has a bearish bias for 20 of the 24 S&P industry groups and for 23 of the 30 DJIA stocks.

The MSCI World (ex US) Index lost 1.0%. The Coppock Curve has a bearish bias for 21 of the 35 non-US markets that we follow on a daily basis.

According to some pundits, Wednesday’s sharp decline was at least partially attributable to the results of the US presidential election. With that in mind, we would note that, on the day after the 2008 election, the S&P rallied to a multi-week high. That rally was attributed to the euphoria associated with the potential for change following that election. However, on the very next day the S&P began a decline from 1102 to 667 that did not end until March 2009. Indeed, the November 2008 reaction...
By Walter Murphy on 11/7/2012 2:20 PM
Murphy’s Law: earlier today we were still without power and heat after eight days. So we headed south – to Pennsylvania. Then earlier tonight we were told that our neighbor’s power was turned on. We will ride out the projected nor’easter and head back on Thursday. With a little luck the monthly will be released by the end of the week.

On Tuesday, the S&P 500 posted its fourth gain in five days with a rally of 0.8%. Advancing stocks exceeded losers by almost 7:2 while the up/down volume ratio was bullish by a more robust 4:1 margin. The daily Coppock Curve has a bullish bias for 14 of the 24 S&P industry groups and for 18 of the 30 DJIA stocks.

The MSCI World (ex US) Index broke a two-day losing streak with a rally of 0.4%. The Coppock Curve has a bearish bias for 18 of the 35 non-US markets that we follow on a daily basis.

We have previously pointed out that the weekly Coppock Curve has a bearish bias, suggesting that any rally attempts in coming weeks will be short term counter trend events....
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