Market Pulse
Author: Created: 3/10/2010 11:54 AM
Market Pulse
By Walter Murphy on 1/28/2013 4:56 PM
“Plain English”

US Equities: The current winning streak (now eight days) is destined to come to an end. However, the Elliott Wave pattern, together with constructive intermediate momentum underpinnings, suggests that a coming pullback will likely prove to be a fourth wave pause within a still unfolding uptrend.

Global Equities: Japan’s Nikkei 225 has gained more than 20% in the past 10 weeks, which is one of its best surges in history. This, “good overbought” condition implies higher highs in the weeks ahead.

Interest Rates: US yields are breaking out relative to our non-US global index. If this continues, the anticipated cyclical uptrend in yields should be more pronounced in the US than in other countries.

Commodities: The weekly Coppock Curve has a bullish bias for many of the 12 commodities in our universe and we expect a majority bullish condition to exist through much – if not all – of the current quarter. These constructive intermediate underpinnings are bolstered by the improving...
By Walter Murphy on 1/24/2013 4:20 PM
On Wednesday, the S&P 500 posted its sixth straight gain with a rally of 0.2%. However declining stocks exceeded losers by 3:2 while the up/down volume ratio was bearish by a more modest 7:6 margin. Turnover was essentially unchanged. The daily Coppock Curve now has a bearish bias for 16 of the 24 S&P industry groups but still has a bullish bias for and for 16 of the 30 DJIA stocks.

Last week the Dow Jones Industrial Average (DJIA) closed at a five-year high and the Dow Jones Transportation Average (DJTA) closed at an all-time high. This combination confirmed a new bullish Dow Theory primary trend change.

Even so, the most compelling aspect of the rallies by these two indexes is the breakout by the DJTA (which finished Wednesday at 5760). While the breakout to an all-time high is noteworthy in its own right, little attention has been made to the notion that the DJTA appears to have completed a multi-year head-and-shoulders bottom. The probabilities for such a pattern are aided by our belief that...
By Walter Murphy on 1/23/2013 4:12 PM
On Tuesday, the S&P 500 posted its fifth straight gain with a rally of 0.4%. Advancing stocks exceeded winners by a bit less than 3:1 and the up/down volume ratio was bullish by a similar margin. Turnover increased by 6.3%. The daily Coppock Curve has a bullish bias for 15 of the 24 S&P industry groups and for 18 of the 30 DJIA stocks.

The MSCI World (ex US) Index gained 0.1%. The daily Coppock Curve has a bullish bias for 20 of the 35 non-US markets in our regular survey.

Internally, this rally is showing signs of fatigue. As mentioned, the daily Coppock Curve has a bullish bias for 15 of the 24 S&P industry groups. This compares with 23 just seven sessions ago. Moreover, only one group is on the oversold side of neutral. This is clear evidence that the short term trend is overbought and deteriorating.

In addition, the 35-day cycle is increasingly mature. Tuesday was the 14th session since the last cycle low. As it approached days 17-21, it will be skating on increasingly thin ice.

...
By Walter Murphy on 1/21/2013 6:01 PM
US Equities: The weekly, monthly, and quarterly Coppock Curves all have a bullish bias even as the daily oscillator appears to be fatigued. All of this suggests higher highs in the weeks ahead despite the likelihood of a near term pullback.

Global Equities: The weekly Coppock Curve has a bullish bias for 32 of the 37 non US markets in our regular survey; this majority bullish condition is expected to continue into late February or early March. A separate examination of 35 country and regional indexes showed that all are currently on a point-and-figure buy signal.

Interest Rates: Even as yields in the US appear to be in the early stages of a cyclical uptrend, the same can be said for global yields.

Commodities: The weekly Coppock Curve has a bullish bias for many of the 12 commodities in our universe and we expect a majority bullish condition to exist through much – if not all – of the current quarter. These constructive intermediate underpinnings are bolstered by the improving long term indicators.

...
By Walter Murphy on 1/17/2013 6:09 PM
On Wednesday, the S&P 500 eked out a 0.02% gain. However, declining stocks exceeded winners by 5:3 and the up/down volume ratio was bearish by a 5:4 margin. Turnover was essentially unchanged. The daily Coppock Curve still has a bullish bias for 18 of the 24 S&P industry groups and for 24 of the 30 DJIA stocks.

The MSCI World (ex US) Index fell 0.6%. The daily Coppock Curve has a bearish bias for 17 of the 35 non-US markets in our regular survey.

The DJ Transportation Index is at all-time highs. The S&P 500 is at a five-year high. The VIX is probing a six-year low. Meanwhile, longer term momentum is overbought and positioned to take on a bearish bias in the weeks and months ahead even as sentiment is overbought and the S&P appears to be in the latter stages of a bearish wedge.

All of this suggests that the market is priced for perfection even as many technical underpinnings imply that the 2009-2013 cyclical “bull market” is increasingly fragile. This is a recipe for disappointment.

...
By Walter Murphy on 1/16/2013 4:50 PM
On Tuesday, the S&P 500 broke a two-day losing streak with a gain of 0.1%. Advancing stocks exceeded losers by a bit less than 2:1 while the up/down volume ratio was bullish by better than 2:1. However, turnover fell by more than 5.0%. The daily Coppock Curve has a bullish bias for 21 of the 24 S&P industry groups and for 27 of the 30 DJIA stocks.

The MSCI World (ex US) Index posted its fourth gain in five days with a rally of 0.3%. The daily Coppock Curve has a bullish bias for 18 of the 35 non-US markets in our regular survey.

Tuesday was important for at least three reasons. First, both the NYSE common stock and S&P 500 cumulative a-d lines reached all-time highs. Second, the DJ Transportation Index rallied to an all-time high. Third – and despite the first two observations – the market has not yet achieved a Dow Theory bull market signal; the DJ industrials remain below their late 2012 high.

That said, we still expect higher highs. The Elliott Wave pattern is still constructive and Fibonacci...
By Walter Murphy on 1/14/2013 6:36 PM
“Plain English”

US Equities: The daily, weekly, monthly, and quarterly Coppock Curves all have a bullish bias, suggesting higher highs for the S&P 500 in the weeks ahead. That said, the cyclical uptrend from the October 2011 lows – as well as the larger 2009-2013 “bull market” – is in its latter stages.

Global Equities: The weekly Coppock Curve has a bullish bias for 32 of the 37 non US markets in our regular survey; this majority bullish condition is expected to continue into late February or early March. A separate examination of 35 country and regional indexes showed that all are currently on a point-and-figure buy signal.

Interest Rates: Ten-year yields are engaged in a rally that should have a Fibonacci relationship with the previous 2011-2012 downtrend. In that regard, the post-July rally has only achieved a 23.6% retracement. We typically expect at least a 38.2% retracement.

Commodities: Last week the weekly Coppock Curve took on a bullish bias for a majority of the 12 commodities...
By Walter Murphy on 1/10/2013 4:19 PM
On Wednesday, the S&P 500 broke a two-day losing streak with a gain of 0.3%. Advancing stocks exceeded losers by 2:1 while the up/down volume ratio was only marginally bullish. Turnover was little changed. The daily Coppock Curve has a bullish bias for 16 of the 24 S&P industry groups and for 18 of the 30 DJIA stocks.

The MSCI World (ex US) Index gained 0.4%. The daily Coppock Curve has a bullish bias for 20 of the 35 non-US markets in our regular survey.

Readers may recall that we had some difficulty determining whether the early June or the late July low was a 20-week cycle low. We leaned toward the July low because it represented three 35-day cycles from the previous 20-week low in March. However, subsequent market action suggests that the June low is, in fact, the better choice. Thus, we simply have to accept the fact that there were only two 35-day cycles between the March and June lows rather than the usual three. Cycles are dynamic; they breathe. To put the recent action into perspective,...
By Walter Murphy on 1/9/2013 5:24 PM
On Tuesday, the S&P 500 recorded its second straight loss with a decline of 0.3%. Declining stocks exceeded winners by almost 3:2 while the up/down volume ratio was bearish by a more robust 7:4 margin. Turnover increased by 9%. The daily Coppock Curve has a bearish bias for 13 of the 24 S&P industry groups and for 16 of the 30 DJIA stocks.

The MSCI World (ex US) Index fell 0.4%. The daily Coppock Curve has a bullish bias for 18 of the 35 non-US markets in our regular survey.

At this juncture, the hourly, daily, weekly, monthly, and quarterly Coppock oscillators are either bottoming or already have a bullish bias. This suggests that the weakness of recent days is the prelude to a “C” wave (or possibly a third wave) rally within the uptrend from the December 31 low. From a non-Elliott Wave perspective, a breakout through 1468 will qualify as a “cup and handle” reversal. Either way, the implication is that a breakout through 1468 will set the stage for a rally to 1494 or so.

Given the current...
By Walter Murphy on 1/7/2013 5:17 PM
“Plain English”

US Equities: 2013 could be a difficult year for the S&P 500. Momentum, seasonal/cycle, sentiment, and Elliott Wave considerations suggest that the index may have its weakest performance since at least 2009.

The Rest of the World: Among the 37 non-US markets in our regular survey, Japan’s Nikkei 225 index appears to have the healthiest momentum underpinnings entering 2013 from the perspective of both the monthly and quarterly Coppock Curves.

Yields: The cyclical uptrend from last July’s low has the potential to remain in force through most of 2013. We say this because the currently constructive monthly Coppock oscillator is positioned to be bullish for much – if not all – of 2013 in both the US and in most of the six countries in our global index.

US Dollar: 2013 could be a difficult year for the dollar index. However, bearish pressures on the dollar from the euro and other currencies should be mitigated by dollar strength versus the yen.

Commodities: 2013 may...
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