Market Pulse
Author: Created: 3/10/2010 11:54 AM
Market Pulse
By Walter Murphy on 8/29/2013 4:53 PM
On Wednesday, the S&P 500 gained 0.3%. Advancing stocks exceeded losers by 6:5 while the up/down volume ratio was bullish by a slightly more robust 4:3 margin. Turnover fell by 14%. The daily Coppock Curve has a bearish bias for 20 of the 24 S&P industry groups and for 22 of the 30 DJIA stocks.

The Dow Jones Global (ex US) Index fell 0.9% and the Dow Jones Emerging Markets index fell 0.7%. Internally, 25 of 35 markets in our regular survey were lower. The daily Coppock Curve has a bearish bias for 33 of the 35 markets.

Over the past two days, WTI crude has gained 3.4%. In so doing, it has broken out from its July-August trading range and, more importantly, has rallied above its February high. The next objective is the April 2011 113.93-114.83 high.

We have been counting this summer’s strength as a breakout from a triangle. Triangles are penultimate patterns and, in this case, it is counted as a “B”-wave within the larger ABC rally from the 2008 low. Indeed, our count is that the current rally...
By Walter Murphy on 8/28/2013 6:23 PM
On Tuesday, the S&P 500 had its worst day since June 20 with a loss of 1.6%. Declining stocks exceeded winners by better than 11:1 while the up/down volume ratio was bearish by a bit less than 12:1. This resulted in a 90% down day for the first time since June 20. The bearish pressures were compounded by a 32% increase in turnover. The daily Coppock Curve still has a bearish bias for 22 of the 24 S&P industry groups and for 24 of the 30 DJIA stocks.

The Dow Jones Global (ex US) Index fell 1.2% and the Dow Jones Emerging Markets index fell 2.0%. Internally, 33 of 35 markets in our regular survey were lower. The daily Coppock Curve has a bearish bias for 29 of the 35 markets.

If anything, today’s decline exacerbated the difference between the S&P and the DJIA. The rally off of last week’s low was enough to lock in the S&P’s 8/2-8/21 decline as a complete pattern. However, the DJIA’s rally was not enough to reverse its uptrend. Thus, today’s sell-off is viewed as a continuation of the DJIA’s decline...
By Walter Murphy on 8/26/2013 3:21 PM
“Plain English”

US Equities: It seems likely that a coming short term rally will be only a “B”-wave within an ongoing ABC decline. If so, it seems probable that this “B”-wave will be no more than a 50%-61.8% retracement of the S&P’s recent 1710-1639 (4.2%) decline. This suggests resistance in the 1666-1683 range.

Global Equities: The S&P SPDR BRIC 40 ETF’s (BIK) weekly Coppock Curve has taken on a bullish bias, but the daily oscillator has been weak and has bearish divergences. Moreover, both the a-d line and the ETF have a series of lower highs. All of this suggests that the ETF is nominally in a downtrend and that, as a group, the BRIC countries remain under pressure.

Interest Rates: While the weekly Coppock oscillator’s recent historic high likely has bullish longer term implications, it is has begun to deteriorate. Our initial estimate is that this new bearish momentum bias can persist through the rest of this year. This suggests that the May-August rally is on its last legs. These conditions,...
By Walter Murphy on 8/22/2013 8:30 AM
On Tuesday, the S&P 500 gained 0.4%. This broke a four-day losing streak, which was the longest such string of the year. Advancing stocks exceeded losers by 17:4 while the up/down volume ratio was bullish by a more modest 3:1 margin. Turnover increased by 3%. The daily Coppock Curve still has a bearish bias for 23 of the 24 S&P industry groups and for 28 of the 30 DJIA stocks.

The Dow Jones Global (ex US) Index fell 0.8%. Internally, 30 of the 34 open markets in our 35 country survey were lower. The daily Coppock Curve has a bearish bias for 28 of the 35 markets.

Tuesday was a bit of an odd day. NYSE common stock breadth had the greatest number of up stocks since July 11 and the S&P 500 came within 0.01% of having its best gain in 13 days, yet the DJIA was down 0.05% prompting some financial headlines to proclaim that it was a “mixed” day.

At this point, the S&P’s decline from its August 2 high (at 1710) has distinct impulsive qualities and important short term indicators are at their most...
By Walter Murphy on 8/19/2013 4:12 PM
“Plain English”

US Equities: The 3.3% decline of recent days is a fraction of our expectations and is best viewed as only part of a developing correction that, in turn, is taking place within a larger uptrend. As such, this correction should be an Elliott Wave ABC(DE) structure that should take weeks, not days, to unfold. As a result, we view this 3.3% correction to date as an “A”-wave that will be followed by a relatively modest “B”-wave rally and then a “C”- wave decline to lower reaction lows.

Global Equities: Much of the Dow Jones Global (ex US) Index’s recent strength can be attributed to the larger markets. This disparity is evident in the global Coppock configuration; the weekly oscillator currently has a bullish bias for 14 of the 20 developed markets in our survey but has a bearish bias for nine of the 17 developing markets. This disparity may be about to change.

Interest Rates: The current rally is in need of a pullback. While the momentum surge to a multi-generational high is constructive...
By Walter Murphy on 8/15/2013 8:21 PM
On Thursday, the S&P 500 had its worst day since late June with a loss of 1.4%. This was its seventh loss in the last nine trading sessions. Declining stocks exceeded winners by better than 6:1while the up/down volume ratio was bearish by less than 3:1. Turnover increased by 18%. The daily Coppock Curve now has a bearish bias for all 24 S&P industry groups and for 26 of the 30 DJIA stocks.

The Dow Jones Global (ex US) Index fell 1.0%. Internally, 25 of the 29 open markets in our 35 country survey were lower. The daily Coppock Curve has a bullish bias for 25 of the 35 markets.

Today was a difficult day for the S&P and most major averages. In addition to its sharp decline, volume surged, momentum is weak, and both breadth and the new high/new low ratio are under pressure. All of this suggests lower lows are yet to come.

With that in mind, the hourly and daily charts give slightly different counts. The former suggest that the S&P is still only in the “A” wave of a larger ABC decline, while the...
By Walter Murphy on 8/14/2013 8:39 PM
On Tuesday, the S&P 500 rallied 0.3%. This broke a two-day losing streak and was only the second gain in the last seven sessions. However, declining stocks exceeded winners by 12:11 while the up/down volume ratio was also bearish by a more robust 13:10 margin. Turnover increased by 6%. There are some preliminary signs of Coppock Curve improvement as the oscillator now has a bearish bias for only 12 of the 24 S&P industry groups; however, 20 of the 30 DJIA stocks still have a bearish bias.

The Dow Jones Global (ex US) Index gained 0.3%. Internally, 34 of the 35 markets in our regular survey were higher (Chile was the exception). As a result, our global daily cumulative a-d line made an all-time high today, as did the a-d lines for Europe and for the top 10 economies. The daily Coppock Curve has a bearish bias for 24 of the 35 markets.

As defined in the glossary in our website, the Bullish Percent Index (BPI) is a breadth/momentum indicator that...
By Walter Murphy on 8/12/2013 2:46 PM
On Thursday, the S&P 500 broke a three-day losing streak with 0.4% rally. Advancing stocks exceeded losers by 5:2 while the up/down volume ratio was bullish by a more robust 3:1 margin. Turnover increased by 6%. The daily Coppock Curve has a bearish bias for 14 of the 24 S&P industry groups and for 20 of the 30 DJIA stocks.

The Dow Jones Global (ex US) Index gained 0.8%. Internally, 25 of the 31 open markets in our 35-country universe were higher. The daily Coppock Curve has a bearish bias for 24 of the 35 markets.

Earlier today, a subscriber noted I have been looking at the S&P since 2000 as being in a big ABCDE pattern but several Wall Street strategists believe we have started a new secular bull market. That prompted him to ask if the move from 2000 to early 2009 was an ABC pattern with a new secular bull starting March of 2009. Below is my edited response.

I don't remember anyone in 1982 saying "this is just like 1949." The bottom line is that anything is possible and the last time I looked,...
By Walter Murphy on 8/12/2013 2:46 PM
US Equities: We are counting the current rally from this past June’s low as the fifth and final wave from the June 2012 low. Once this trend is reversed, the market should experience at least a 38.2% retracement of the 2012-2013 rally. This implies an approximate 10% correction to the 1540-1530 area. Such a correction should be enough to qualify as the sixth wave within the larger 2011-2013 uptrend and position the S&P for return to new highs.

Global Equities: The S&P 500 has been in an uptrend versus the Dow Jones Global Index since 2008. The S&P/DJW relative is deep into an intermediate wave (3). This, plus deteriorating relative momentum, suggests that the US market is close to a multi-month period of underperformance versus the rest of the world.

Interest Rates: We are faced with both a confirmed intermediate uptrend from the July 2012 low and a previously confirmed post-1981 low. This combination suggests that the current uptrend will eventually work its way higher in a C-of-(C) rally. Once...
By Walter Murphy on 8/8/2013 3:40 PM
On Wednesday, the S&P 500 fell 0.4% for its first three-day losing streak since early June. Declining stocks exceeded winners by 13:5 while the up/down volume ratio was bearish by a slightly more modest 7:3 margin. Turnover fell by 3%. 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 0.8%. Internally, 21 of the 34 open markets in our 35-country universe were lower. The daily Coppock Curve has a bearish bias for 27 of the 35 markets.

The S&P 500 traded to as low as 1685 on Wednesday while the DJIA’s low was 15422. Thus, the S&P remained above benchmark support at 1676 and the DJIA held above similarly important support at 15405. If these key levels are violated, the indexes will have completed a July-August top formation, reversing the post-June uptrend. Since we view the rally of recent weeks as the fifth wave from the June 2012 low, such a reversal will arguably complete the 2012-2013 uptrend....
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