Market Pulse
Author: Created: 3/10/2010 11:54 AM
Market Pulse
By Walter Murphy on 6/28/2013 2:28 PM
On Thursday, the S&P 500 posted its third straight gain with a rally of 0.6%. It was also the third straight day of declining volume as turnover fell by 6%. This combination of three straight equity gains accompanied by three straight days of lower volume last happened in mid-March. Advancing stocks exceeded losers by a bit less than 6:1 while the up/down volume ratio was bullish by slightly more than 4:1. The daily Coppock Curve has a bullish bias for 18 of the 24 S&P industry groups and for 25 of the 30 DJIA stocks.

The Dow Jones Global (ex US) Index had its best day since mid-April with a rally of 1.1%. Internally, 31 of the 35 non-US markets that we most regularly follow were up for the day. The daily Coppock Curve has a bullish bias for 29 of the 35 markets.

Earlier this week, we said that, while the S&P’s May-June correction had satisfied minimal price retracement and time considerations for a complete fourth wave, we were inclined to view the correction as an “A”-wave within a larger pattern....
By Walter Murphy on 6/27/2013 3:24 PM
On Wednesday, the S&P 500 posted its second straight 1.0% gain. Advancing stocks exceeded losers by 9:4 while the up/down volume ratio was bullish by a slightly more robust 11:4 margin. However, turnover fell for the second straight day. The daily Coppock Curve has a bullish bias for 16 of the 24 S&P industry groups and for 19 of the 30 DJIA stocks.

The Dow Jones Global (ex US) Index rallied by 1.0%. Internally, 29 of the 35 non-US markets that we most regularly follow were up for the day. The daily Coppock Curve has a bullish bias for 27 of the 35 markets.

For some time we have pointed to 1265 as an important support level for gold in that it represents a 38.2% retracement of the entire 1999-2011 cycle degree bull market. A 38.2% retracement is typically our minimum expectation. More recently, we expanded our focus to 1265-1245 in order to account for smaller wave relationships but, even with that expansion, today’s decline rather decisively breached support.

On the one hand, this breakdown...
By Walter Murphy on 6/26/2013 4:13 PM
 

On Tuesday, the S&P 500 gained 1.0%, which was its best performance in almost two weeks. Advancing stocks exceeded losers by almost 6:1 while the up/down volume ratio was bullish by better than 6:1. These bullish underpinnings were mitigated somewhat by a 21% decrease in turnover. The daily Coppock Curve has a bearish bias for 17 of the 24 S&P industry groups and for 20 of the 30 DJIA stocks.

The Dow Jones Global (ex US) Index rallied by 0.5%, breaking a three-day losing streak. Internally, 24 of the 35 markets that we most regularly follow were up for the day. The daily Coppock Curve has a bearish bias for 22 of the 35 markets.

By most hourly and daily momentum measures the S&P reached oversold levels over the past two days. Moreover, bullish divergences are associated with the hourlies. So a case can be made that Tuesday’s rally reflected the oversold and diverging conditions. However, the bigger question has to do with whether this rally will be followed by renewed weakness or whether...
By Walter Murphy on 6/24/2013 3:15 PM
“Plain English”

US Equities: A case can be made that the minimum requirements for a complete May-June correction have been satisfied. However, we are inclined to think that there is more life left in this pattern at least in terms of time, if not price.

Global Equities: Our daily cumulative a-d line representing the markets of the world’s 10 largest economies has broken below its uptrend line from last November’s low. However, the breakdown is still well short of an expected minimum 38.2% retracement.

Interest Rates: Our immediate focus is on the notion that the bullish weekly Coppock Curve is on a pace to reach its most overbought condition in many years. If so, such a confirming, “good overbought” reading would suggest that a coming peak will be followed by higher highs after an intervening correction works off the overbought condition.

Commodities: Gold’s daily Coppock did not confirm last week’s new low and the weekly oscillator is positioned for a July bottom. This suggests that...
By Walter Murphy on 6/21/2013 8:55 PM
On Thursday, the S&P 500 suffered its largest decline since November 2011 with a loss of 2.5%. Declining stocks exceeded winners by almost 30:1 while the up/down volume ratio was bearish by a bit less than 19:1. The result was the second consecutive 9:1 down day, which is an event not seen since October-November 2009. These bearish pressures were further exacerbated by a 38% increase in turnover. The daily Coppock Curve has a bearish bias for 20 of the 24 S&P industry groups and for 21 of the 30 DJIA stocks.

The Dow Jones Global (ex US) Index fell 4.4%, which was its largest setback since September 2011. Internally, 32 of the 35 markets that we most regularly follow were down for the day (Argentina was on holiday). The daily Coppock Curve has a bearish bias for 23 of the 35 markets.

Yesterday was a day with my granddaughters, ages three and two. During the day when the younger one was surprised by something, she was inclined to say, “Oh Man!” So, when we saw that the S&P had its worst day in 19 months...
By Walter Murphy on 6/18/2013 9:32 PM
On Tuesday, the S&P 500 rallied by 0.8%. Advancing stocks exceeded losers by a bit less than 4:1; the up/down volume ratio was bullish by a similar margin. Turnover was flat. The daily Coppock Curve now has a bullish bias for 20 of the 24 S&P industry groups and for 19 of the 30 DJIA stocks.

The Dow Jones Global (ex US) Index fell 0.1%. Internally, however, 22 of the 35 markets that we most regularly follow were up for the day. The daily Coppock Curve has a bullish bias for 23 of the 35 markets.

We have been making the case that the correction since May’s high should be a relatively well-contained trading range. In that vein, we have suggested that an ABCDE triangle or an ABC flat were the two most likely patterns. The “B”-wave in either pattern could retrace a good deal – if not all – of the May-June decline.

The post-May pattern has been fulfilling those expectations, even allowing for the fact that the rally of the past few days, which we deem to be a b’-wave, has been a bit stronger than...
By Walter Murphy on 6/17/2013 7:34 PM
“Plain English”

US Equities: The S&P’s short term (daily) Coppock Curve is oversold and improving, but may remain at or below its neutral zero line. If so, this would be a sign of weakness and in stark contrast to November-May when it persistently remained above the zero line. At the same time, the weekly oscillator is in a downtrend and is positioned to remain under pressure until late August or early September.

Global Equities: The Dow Jones Global (ex US) Index has violated the uptrend line from the June 2012 low. In a similar vein, the weekly Coppock Curve, is in a downtrend for 32 of the 37 countries that we follow. This majority bearish bias is positioned to persist into late August or early September. Thus, we continue to think that the index will move lower in coming weeks and that Fibonacci retracements should be applied to the entire 2012-2013 uptrend.

Interest Rates: We continue to view May’s 1.61% low as an intermediate (B)-wave. The bullish weekly Coppock Curve is positioned to...
By Walter Murphy on 6/14/2013 2:16 PM
On Thursday, the S&P 500 rallied by 1.5%. This performance trailed only the 2.5% gain on the first session of the year as the best year-to-date performance. Advancing stocks exceeded losers by better than 10:1 while the up/down volume ratio was bullish by a more modest 7:1 margin. This performance was buttressed by a 6% increase in turnover. The daily Coppock Curve now 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 fell 0.9% and violated an important support level. Internally, 24 of the 35 markets that we most regularly follow were down for the day. The daily Coppock Curve has a bearish bias for 31 of the 35 markets.

As noted, the daily Coppock Curve is showing signs of life for a majority of S&P groups and for most DJIA stocks. In both instances the oscillator has had a majority bearish condition since just before the S&P’s May 22 peak. Our preliminary estimate is that these new constructive underpinnings can persist into...
By Walter Murphy on 6/13/2013 8:59 AM
On Tuesday, the S&P 500 fell 1.0%. Declining stocks exceeded winners by 8:1, which was the highest bearish margin since April. The up/down volume ratio was bearish by a more modest 4:1 margin. Turnover increased by 16%, confirming the breadth and volume pressures. The daily Coppock Curve has a bearish bias for 19 of the 24 S&P industry groups and for 21 of the 30 DJIA stocks.

The Dow Jones Global (ex US) Index fell 0.6%. Internally, 33 of the 35 markets that we most regularly follow were down for the day; Australia was higher and China was closed. The daily Coppock Curve has a bearish bias for 30 of the 35 markets.

On Tuesday, 10-year yields fell two basis points. But during the day yields reached an 18-month high before turning back. The reversal resulted in an outside day (both a higher high and a lower low compared to Monday’s range) and this, together with the lower close, suggests that there will be some downside follow-through. This potential for further weakness is buttressed by a deteriorating...
By Walter Murphy on 6/11/2013 2:03 PM
“Plain English”

US Equities: The May-June decline was only 10 days, far short of the 43 days needed during last year’s June-November pullback. Based on that prior decline, we would expect this correction to persist for a minimum of 16-27 days if not the full 43. In addition, the Rule of Alternation states that this correction should alternate in complexity with last year’s decline. That earlier pattern was a fairly straight-forward downtrend so, if we are correct that it is of the same wave degree as the current decline, this should be a more complex trading range.

Global Equities: Both Argentina and Chile are on five-week losing streaks and our regional daily cumulative-advance decline line has broken down. Not surprisingly, therefore, the iShares Latin America 40 ETF (ILF) has declined to levels not seen since last June.

Interest Rates: The daily Coppock Curve is overbought and peaking. However, the oscillator confirmed the recent highs and the larger weekly indicator has a bullish bias...
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