Market Pulse
Author: Created: 3/10/2010 11:54 AM
Market Pulse
By Walter Murphy on 7/29/2013 4:02 PM
“Plain English”

US Equities: In recent comments, we noted that the S&P and DJIA had slightly different counts from their respective June lows. Last week’s volatility only confirmed the disparity between the two charts. The DJIA broke below 15415.71 before recovering, but the S&P held above 1671.84. Thus, the DJIA’s June-July rally has been reversed, but the S&P’s has not.

Global Equities: The Nikkei 225 has been in reasonable harmony with the dollar/yen cross-rate. Thus, with the prospects for some dollar weakness in the weeks ahead, last week’s 3.2% loss for the Nikkei could be a sign of further weakness in Japan’s equity market.

Interest Rates: The weekly Coppock Curve is at the highest level in the 50 years of data in our database. This confirming, good overbought reading suggests that a coming peak will be followed by higher highs after an intervening correction works off the overbought condition.

Commodities: While a coming rally by the Continuous Commodity Index may be the best...
By Walter Murphy on 7/25/2013 4:27 PM
On Wednesday, the S&P 500 recorded its second straight loss with a decline of 0.4%. This was the first set of consecutive losses since June 18-19. Declining stocks exceeded winners by 13:4 while the up/down volume ratio was bearish by a more modest 11:4 margin. Turnover increased by 8%. The daily Coppock Curve has a bearish bias for 23 of the 24 S&P industry groups and for 23 of the 30 DJIA stocks.

By contrast, the Dow Jones Global (ex US) Index gained 0.1%. Internally, 24 of the 35 markets in our regular survey were higher and 10 were lower. The daily Coppock Curve now has a bearish bias for 20 of the 35 markets.

The daily Coppock Curve has decisively turned down for both the S&P 500 and a majority of its 24 industry groups. On balance, we currently expect this bearish bias to continue into mid-August. It seems, therefore, that the S&P could well be at risk of reversing the current June-July uptrend. Since this rally can be counted as the final fifth wave up from the June 2012 low, such a reversal...
By Walter Murphy on 7/24/2013 4:31 PM
On Tuesday, the S&P 500 recorded only its second loss in the past 14 sessions with a loss of 0.2%. Declining stocks exceeded winners by only 17 issues; however, the up/down volume ratio was bullish by a 4:3 margin. Turnover expanded by 11%. The daily Coppock Curve has a bearish bias for 15 of the 24 S&P industry groups and for 17 of the 30 DJIA stocks.

By contrast, the Dow Jones Global (ex US) Index gained 1.1%. Internally, 24 of the 35 markets in our regular survey were higher and 10 were lower. The daily Coppock Curve has a bullish bias for 23 of the 35 markets.

In our most recent Short Term Review, we noted that gold’s weekly Coppock Curve appears to have recorded a bullish reversal, suggesting that the best rally since last October’s peak might be close at hand. Monday’s rally bolstered this expectation. Moreover, this surge allowed short term momentum indicators to breakout through resistance levels. So while this oscillator is overbought (and positioned for a bearish reversal in the days ahead),...
By Walter Murphy on 7/22/2013 4:30 PM
“Plain English”

US Equities: Once the current rally is complete, the S&P will be positioned for the largest correction since May-October 2011. So it is important to get a sense of where we are within the post-June pattern. The S&P’s chart suggests that it is still in its post-June third wave. By contrast, DJIA’s chart implies that it is in the post-June fifth wave. In both instances, however, a reversal this coming week back below last week’s low will be enough to reverse the June-July rally.

Global Equities: Short term momentum has been constructive for most global markets since late June. However, we expect this majority bullish condition to reverse into a majority bearish condition virtually any day. At the same time, the weekly oscillator has been weak for most markets since the May highs. Thus, coming near term pressures could signal a resumption of the global post-May downtrend.

Interest Rates: The weekly Coppock Curve still has a bullish bias, is positioned to remain constructive for...
By Walter Murphy on 7/15/2013 4:14 PM
“Plain English”

US Equities: The S&P 500 is currently in the third wave of its uptrend from June’s 1560 low. Nearby support is in the 1651-1642 range. A normal fourth wave pullback within the post-June uptrend should not violate this range in a meaningful way. If it does, it would be an indication that that the minimum requirement for complete uptrends from both the June 2013 and the June 2012 lows had been satisfied.

Global Equities: Last week’s strength could be a sign that global markets may soon begin a period of relative strength compared to the US market. In addition to last week’s strong performance, there are signs that the weekly Coppock Curve is positioned for a mid-to-late August bottom for most markets. Similarly, the weekly Coppock Curve for the MSCI World (ex US) index relative to the S&P 500 is also positioned for an August bottom.

Interest Rates: While the post-June rally counts as a five-wave sequence on the hourly chart, the entire post-May uptrend can be viewed as an impulse...
By Walter Murphy on 7/12/2013 3:23 PM
On Thursday, the S&P 500 posted its sixth straight gain. While this is the longest winning streak since March, the more important consideration is that Thursday’s 1.4% gain is not only the best return within the current streak, it is also the best performance in a month. Moreover, turnover increased by 15% to its highest level of July. Advancing stocks exceeded losers by almost 7:1; the up/down volume ratio was bullish by a similar margin. The daily Coppock Curve has a bullish bias for all 24 S&P industry groups and for all 30 DJIA stocks.

The Dow Jones Global (ex US) Index had its best gain since last September with a rally of 2.1%. Internally, 33 of the 35-country indexes in our universe were higher. The daily Coppock Curve has a bullish bias for 34 of the 35 markets.

In recent comments, we have repeatedly said that it has been difficult to determine whether the June-July rally is a high “B”-wave within a complex post-May fourth wave correction or a fifth wave of a larger uptrend from the June...
By Walter Murphy on 7/12/2013 8:40 AM
On Wednesday, the S&P 500 rallied by only 0.02%, but this was enough for the index’s fifth straight gain. This is the longest winning streak since May. Advancing stocks exceeded losers by 5:4 but the up/down volume ratio was bearish by a 5:4 margin. Turnover fell by 5%. The daily Coppock Curve has a bullish bias for all 24 S&P industry groups and for 29 of the 30 DJIA stocks.

The Dow Jones Global (ex US) Index gained 0.6%. Internally, the results were more mixed as 18 of the 35-country indexes in our universe were higher and 17 were lower. The daily Coppock Curve has a bullish bias for 34 of the 35 markets.

WTI crude rallied 2.8% on Wednesday, which was its second best day of the year. This allowed oil to more decisively pull away from the recently penetrated 2011-2013 resistance trend line. This, plus the fact that the weekly Coppock Curve is positioned to maintain its current bullish bias for another 5-8 weeks, suggests that oil has the potential to test February’s 109.49 high. This potential is...
By Walter Murphy on 7/10/2013 6:03 PM
On Tuesday, the S&P 500 posted its fourth straight gain with a rally of 0.7%. Advancing stocks exceeded losers by better than 4:1 while the up/down volume ratio was bullish by a more modest 17:5 margin. However, turnover fell by 6%. The daily Coppock Curve has a bullish bias for 23 of the 24 S&P industry groups and for 29 of the 30 DJIA stocks.

The Dow Jones Global (ex US) Index gained 0.8%. Internally, 25 of the 33 open markets (within our 35-country universe) were higher and eight were lower. The daily Coppock Curve has a bullish bias for 33 of the 35 markets.

Compared to the US, the stock markets in the rest of the world are, as a group, living in a different world. As of Monday’s close, the S&P 500 is up 15.8% year to date. By contrast, the Dow Jones Global (ex US) Index is down 0.1%.

This discrepancy is even more telling when we look at the global index relative to the S&P. The relative index has been in a downtrend for four years and is within shouting distance of breaking its September...
By Walter Murphy on 7/9/2013 3:13 PM
On Monday, the S&P 500 posted its third straight gain with a rally of 0.5%. Advancing stocks exceeded losers by 2:1 while the up/down volume ratio was bullish by a more modest 7:4 margin. Post-holiday turnover increased by 26%. The daily Coppock Curve has a bullish bias for all 24 S&P industry groups and for 28 of the 30 DJIA stocks.

The Dow Jones Global (ex US) Index gained 0.2%. Internally, it was a mixed performance as 18 of the 35 non-US markets that we most regularly follow were higher and 17 were lower. However, the daily Coppock Curve has a bullish bias for 33 of the 35 markets (the exception is Poland).

In our weekend update, we noted that, while 1630-1655 was an important resistance area, particular emphasis was on the more narrow trend and Fibonacci resistance in the 1630-1639 range. On Monday, the S&P 500 carried through the more narrow range on both an intra-day and closing basis. This, plus the broad-based constructive Coppock underpinnings, suggests higher highs in the days ahead.

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By Walter Murphy on 7/3/2013 3:05 PM
“Plain English”

US Equities: It is not a stretch to say that we will see two more corrections and two more rallies to new highs before the primary uptrend from the 2009 low is complete.

The Rest of the World: From a Coppock Curve perspective, we expect to see a majority bearish condition for major equity markets by the end of August. The current pressures that are already evident for a majority of developing markets will likely be more pronounced by that time. Continued weakness, as many country oscillators fall below their respective zero lines, will likely follow fairly quickly thereafter.

Yields: The improving weekly Coppock Curve may not peak until late July or early August and is still on a pace to reach a multi-month breakout of its own. Moreover, the monthly oscillator is positioned to remain constructive for another 5-9 months. Thus, we may have to wait for the next intermediate top after the expected July August momentum peak before expecting an end to the post-2012 uptrend.

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