Market Pulse
Author: Created: 3/10/2010 11:54 AM
Market Pulse
By Walter Murphy on 4/29/2013 3:11 PM
“Plain English”

US Equities: The April 18 low qualifies as at least a 35-day – and perhaps a 20-week – cycle low. On April 17-18, there were more new 52-week lows than highs for the first time since February and the second time since November. Moreover, on April 18 almost half of the stocks in the NYSE Composite (and a bit more than 42% of the stocks in the S&P Composite 1500) were at least 10% below their 52-week high. These conditions suggest that the headline indexes were hiding the fact that much of “the market” has been in a full-blown correction in recent weeks.

Global Equities: We previously suggested that the Dow Jones Global (ex US) Index’s early April high was likely a high “B” wave following March’s peak. The subsequent decline (which held indicated support at 213-212), followed by last week’s rally, helps confirm that count. As a result, further strength could be counted as the kick-off for the fifth wave from last June’s low.

Interest Rates: US 10-year yields have been testing...
By Walter Murphy on 4/26/2013 2:10 PM
On Thursday, the S&P 500 posted its fifth straight gain with a rally of 0.4%. Advancing stocks exceeded losers by a bit better than 2:1 while the up/down volume ratio was bullish by a slightly more robust 9:4 margin. Turnover increased by 8.0%. The daily Coppock Curve has a bullish bias for 16 of the 24 S&P industry groups but has a bearish bias for 16 of the 30 DJIA stocks.

The Dow Jones Global (ex US) Index also rallied for the fifth consecutive day with a gain of 0.4%. The daily Coppock Curve has a bullish bias for 30 of the 35 markets that we most regularly follow on a daily basis.

As noted, the S&P 500 (and other indexes) is on a winning streak. However, the “500” is still below its recent all-time high (recorded earlier this month). By contrast, both the NYSE all-share and NYSE common stock cumulative advance-decline lines have broken out to new all-time highs. Moreover, our Elliott Wave counts for the a-d lines are not complete. On a number of occasions, we have noted that major market tops...
By Walter Murphy on 4/25/2013 4:19 PM
On Wednesday, the S&P 500 rallied 0.01 points, but that was enough to extend its winning streak to four days. Despite this paltry gain, breadth was solidly positive; advancing stocks exceeded losers by 7:3 and the up/down volume ratio was bullish by a slightly smaller margin. Turnover was little changed. The daily Coppock Curve has a bullish bias for 15 of the 24 S&P industry groups and for 15 of the 30 DJIA stocks.

The Dow Jones Global (ex US) Index also rallied for the fourth consecutive day with a gain of 1.0%. The daily Coppock Curve has a bullish bias for 30 of the 35 markets that we most regularly follow on a daily basis.

Yesterday’s comment was mostly focused on the prospects for some short term improvement. That said, we did note that we expect the currently deteriorating weekly Coppock Curve to withstand any short term strength. The oscillators for the S&P and for most of its 24 industry groups are positioned to have a bearish bias through much, if not all, of the current quarter. It will...
By Walter Murphy on 4/24/2013 3:08 PM
On Tuesday, the S&P 500 posted its third straight gain with rally of 1.0%. Advancing stocks exceeded winners by better than 5:1 while the up/down volume ratio was bullish by a bit less than 4:1 margin. Turnover increased by 19%. The daily Coppock Curve has a bullish bias for 18 of the 24 S&P industry groups and for 21 of the 30 DJIA stocks.

The Dow Jones Global (ex US) Index rallied for the third consecutive day with a gain of 0.9%. The daily Coppock Curve has a bullish bias for 27 of the 35 markets that we most regularly follow on a daily basis.

Earlier this month, we noted that, while the daily Coppock Curve was then bottoming, we did not expect its bullish bias to last for more than a few days compared with a more normal duration of several weeks. As it happened, the early April improvement lasted for all of five days.

Now the oscillator is in position to once again establish a short term bottom. This time, however, the expected improvement could have a more normal life span and carry well...
By Walter Murphy on 4/22/2013 3:41 PM
“Plain English”

US Equities: The S&P 600, the Russell 2000, and the DJ Transports were sufficiently weak to reverse their November uptrends as complete patterns. All of this implies that if the S&P’s post-November uptrend has not been officially reversed, it soon will be

Global Equities: Global markets appear to be in the relatively early stages of a broad-based intermediate correction. Overall, the intermediate pressures could persist into the late second quarter or the early third quarter.

Interest Rates: We continue to count March’s high as an intermediate (A) wave. Currently, the weekly Coppock is deteriorating, but is still on the overbought side of neutral. This suggests that the current post-March (B) wave decline could work its way still lower for another 6-9 weeks.

Commodities: Commodities were broadly weak last week. Nine of the 12 commodities in our regular survey were lower. Since the current decline has already retraced more than 61.8% of the S&P/GSCI Commodity Index’s...
By Walter Murphy on 4/18/2013 3:43 PM
On Wednesday, the S&P 500 fully reversed Tuesday’s rally (and then some) with a 1.4% decline. Declining stocks exceeded winners by 25:2 while the up/down volume ratio was bullish by a more modest 10:1 margin. Even so, this was enough to record the first 90% down day since late February. These pressures were exacerbated by a 17% increase in turnover. The daily Coppock Curve has a bearish bias for all 24 S&P industry groups and for 21 of the 30 DJIA stocks.

The Dow Jones Global (ex US) Index posted its fourth straight decline with a loss of 0.9%. The daily Coppock Curve has a bearish bias for 26 of the 35 markets that we most regularly follow on a daily basis.

In recent comments we have used various metaphors to describe the fragility of the current post-November uptrend (e.g., skating on thin ice, in the ninth inning). After yesterday’s decline, the ice appears to be cracking, As noted, the daily Coppock Curve is deteriorating for all 24 S&P 500 industry groups. At the same time, the weekly oscillator...
By Walter Murphy on 4/17/2013 3:50 PM
On Tuesday, the S&P 500 recovered from its worst day of the year with its best day of 2013 with a rally of 1.4%. Advancing stocks exceeded losers by better than 9:1 while the up/down volume ratio was bullish by a more modest 6:1 margin. Turnover decreased by 22%. The daily Coppock Curve has a bullish bias for 15 of the 24 S&P industry groups and for 17 of the 30 DJIA stocks.

The Dow Jones Global (ex US) Index posted its third straight decline with a loss of 0.2%. The daily Coppock Curve has a bearish bias for 24 of the 35 markets that we most regularly follow on a daily basis.

There are several things that strike us about the turmoil of the past few days. The Thursday-Monday decline failed to break 1540-1538 support, which means that the post-November uptrend is still intact. In addition, the daily Coppock Curve is in an uptrend. Finally, the Thursday-Monday decline was a counter-trend three-wave pattern while the Monday-Tuesday rally is (at least for now) a five-wave structure. Typically, five waves...
By Walter Murphy on 4/15/2013 3:35 PM
“Plain English”

US Equities: The weekly oscillator has a bearish bias. Thus, the next short term peak will likely have bearish intermediate implications. Within this increasingly fragile momentum background, our proprietary sentiment index is overbought. Moreover, breadth indicators such as the McClellan Summation Index and the Bullish Percent Index are deteriorating. All of this suggests that, despite last week’s strength, the post-November uptrend is in the ninth inning.

Global Equities: The Dow Jones Global Index’s daily Coppock Curve has a bullish bias, but the weekly oscillator peaked a month ago. Similarly, the weekly oscillator has a bearish bias for 33 of 37 markets. All of this implies that global markets are in the early stages of a broad-based intermediate correction. Thus, the next short term peak will likely have bearish intermediate implications.

Interest Rates: The violation of 1.84%-1.80% support early this month, followed by last week’s test of the breakdown point, effectively...
By Walter Murphy on 4/11/2013 4:10 PM
On Wednesday, the S&P 500 posted its third straight gain – and its best since late February – with a rally of 1.2%. Advancing stocks exceeded losers by better than 5:1 while the up/down volume ratio was bullish by a more modest 3:1 margin. Turnover increased by 7%. The daily Coppock Curve has a bullish bias for 21 of the 24 S&P industry groups and for 20 of the 30 DJIA stocks.

The iShares MSCI All Country World (ex US Index ETF gained 0.6%. The daily Coppock Curve has a bullish bias for 26 of the 35 markets that we most regularly follow on a daily basis.

Wednesday’s overall strength effectively ruled out the notion that the rally from last Friday’s low is a “B” wave within an ABC flat or an ABCDE triangle. The breadth ratio, which was one of the strongest of the year, is not characteristic of a “B” wave. Moreover, the hourly Coppock is at its highest level since January 3. Finally, AAII bears came in at its highest level since July 2010. All of this suggests that the post-November rally is extending...
By Walter Murphy on 4/10/2013 3:28 PM
On Tuesday, the S&P 500 rallied 0.4%. Advancing stocks exceeded losers by 7:6 while the up/down volume ratio was bullish by a more robust 2:1 margin. Turnover increased by 13%. The daily Coppock Curve has a bullish bias for 17 of the 24 S&P industry groups and for 19 of the 30 DJIA stocks,

Tuesday’s rally was the first back-to-back gain since March 13-14 and allowed both the S&P 500 and DJIA to record new 2009-2013 intra-day highs. However, The DJIA closed at an all-time high but other indexes such as the DJ Transports, the S&P indexes (500, 400, 600), and the Russell 2000 failed to do the same. Even within the DJIA, 24 of its 30 components failed to make their own new high. More broadly, fully 40% of the stocks in the NYSE are now below their 50-day moving average; this compares with only 10% in January.

We recently commented that there was increased evidence that the big cap generals were leading the smaller cap troops. Typically, this is not a good thing as it increases bearish divergences in...
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