Market Pulse
Author: Created: 3/10/2010 11:54 AM
Market Pulse
By Walter Murphy on 9/26/2013 9:15 AM
On Wednesday, the S&P 500 fell 0.3%. This was its fifth straight decline, which is the longest losing streak of the year. As a result, the index is now little changed from its May high. Declining stocks exceeded winners by 8:7 but the up/down volume ratio was marginally bullish. Turnover fell by 3%. The daily Coppock Curve has a bearish bias for 22 of the 24 S&P industry groups and for 28 of the 30 DJIA stocks.

The Dow Jones Global (ex US) Index fell by less than 0.1% and the Dow Jones Emerging Markets index lost 0.2%. Internally, 20 of the 35 markets in our regular survey were lower. The daily Coppock Curve has a bearish bias for 28 of the 35 markets.

West Texas Intermediate crude oil closed at 102.30 on Wednesday, breaking below the 104-103 support level that we have been highlighting for some time. At the least, this breakdown – which was accompanied by deteriorating daily and weekly Coppock Curves – completed a top formation and reversed the uptrend from last April’s low. This suggests that oil...
By Walter Murphy on 9/25/2013 12:22 PM
On Tuesday, the S&P 500 fell for the fourth straight day with a loss of 0.3%. However, advancing stocks exceeded losers by 11:10 even as the up/down volume ratio was bearish by a similar margin. Turnover increased 5%. The daily Coppock Curve now has a bearish bias for 21 of the 24 S&P industry groups and for 23 of the 30 DJIA stocks.

The Dow Jones Global (ex US) Index fell 0.1% and the Dow Jones Emerging Markets index lost 0.5%. Internally, 34 of the 35 markets in our regular survey were open and, of those, 18 were lower. The daily Coppock Curve has a bearish bias for 23 of the 35 markets.

As noted in the glossary on our website, the Bullish Percent Index (BPI) is a breadth/momentum indicator that is most commonly calculated by dividing the number of stocks that are trading on a Point and Figure (P&F) buy signal by the total number of stocks within the group being analyzed. Above 70% is nominally considered overbought, while below 30% is oversold. We regularly monitor...
By Walter Murphy on 9/24/2013 3:25 PM
“Plain English”

US Equities: The S&P’s monthly Coppock Curve bottomed in early 2009 and has been above its neutral zero line since late 2009. Similarly, the weekly Coppock indicator has been above its zero line since late 2012. The ability of the oscillator to remain in positive territory through thick and thin attests to the linear nature of the underlying trend. Therefore, the Coppock Curves are objective evidence that both the post-2009 uptrend and the uptrend from the November 2012 low are still intact.

Global Equities: The weekly Coppock Curve has a bullish bias for all 37 non-US markets that we most regularly follow. However, bearish reversals for a majority of the markets are likely by mid-to-late October. In fact, that topping process could begin as early as this week since we expect a majority of the daily oscillators to take on a bearish bias in coming days.

Interest Rates: The intermediate trend posted its first lower low since the early May low (at 1.61%). This change in character,...
By Walter Murphy on 9/20/2013 9:26 AM
On Thursday, the S&P 500 broke a four-day winning streak with a loss of 0.2%. Nonetheless, the index made a higher low for the ninth straight day, which is the fourth longest such string since the 2009 low. Declining stocks exceeded winners by 3:2 while the up/down volume ratio was bearish by a more robust 5:3 margin. Turnover fell 6%. The daily Coppock Curve has a bullish bias for 22 of the 24 S&P industry groups and for 29 of the 30 DJIA stocks.

The Dow Jones Global (ex US) Index rallied 1.9% on Thursday and the Dow Jones Emerging Markets index gained 2.1%. Internally, four of the 35 markets in our regular survey were closed; of the remaining 31, 28 were higher. The daily Coppock Curve has a bullish bias for 31 of the 35 markets.

Friend and former Merrill Lynch colleague David Rosenberg publishes a must read daily comment entitled Breakfast with Dave. In Wednesday’s piece, Dave compared 10-year yields with various measures of inflation. As most readers of our comments know, we believe that yields...
By Walter Murphy on 9/19/2013 3:39 PM
On Wednesday, the S&P 500 recorded its fourth straight gain (and 13th in 15 sessions) with a rally of 1.2%. This was its best performance since August 1 – the day before the August 2 peak. The result was a breakout to an all-time high. Advancing stocks exceeded losers by 11:2 while the up/down volume ratio was bullish by better than 7:1. The 44% increase in turnover was the biggest surge of the year. 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 rallied 0.4% but the Dow Jones Emerging Markets index fell by less than 0.1%. Internally, two of the 35 markets in our regular survey were closed; of the remaining 33, 20 were higher. The daily Coppock Curve has a bullish bias for 29 of the 35 markets.

In yesterday’s STR we noted that, if both the S&P and the DJIA were to achieve new all-time highs, the breakout would likely mark a high “B”-wave in a larger ABC correction from the early August high or a continuation...
By Walter Murphy on 9/18/2013 3:19 PM
On Tuesday, the S&P 500 recorded its 12th gain in the last 14 sessions with a rally of 0.4%. Advancing stocks exceeded losers by 11:4 while the up/down volume ratio was bullish by a similar margin. However, turnover fell by 10%. 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 fell 0.3% while the Dow Jones Emerging Markets index gained less than 0.1%. Internally, 21 of the 35 markets in our regular survey were lower. However, the daily Coppock Curve still has a bullish bias for 33 of the 35 markets.

Both the S&P and the DJIA appear to be on the verge of recording new all-time highs. If that were to occur, it will likely prove to be more of an ending than a beginning. In our most recent STR, we allowed for the possibility that August’s modest decline could prove to be a complete intermediate decline. While that is possible, it does not seem probable from the perspective of momentum and cycle/seasonal considerations.

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By Walter Murphy on 9/16/2013 3:13 PM
“Plain English”

US Equities: In S&P terms, we see a three-wave correction that did not break an uptrend while the DJIA’s decline decisively broke trend and arguably did so on five waves. Moreover, if the recent declines stand on their own and are not part of a larger correction, they will be the smallest intermediate corrections since at least the 2011 low. Indeed, at 4.8%, the S&P’s correction could prove to be the smallest decline since the 2009 low.

Global Equities: In recent days, our global daily cumulative advance-decline line recorded an all-time high as did the a-d lines for Europe and the PacRim. The exception has been Latin America but, while this a-d line is well below its early 2013 high, it has broken out from a base. Much of that regional strength has come from Argentina.

Interest Rates: As is the case with the US, the weekly Coppock oscillator for our global yield index is deteriorating and is positioned to remain under pressure through the rest of the year. Much the same can...
By Walter Murphy on 9/11/2013 4:36 PM
On Tuesday, the S&P 500 recorded its sixth straight gain with a rally of 0.7%. Advancing stocks exceeded losers by a bit less than 3:1 while the up/down volume ratio was bullish by a more modest 5:2 margin. Turnover increased by 19%. 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 rallied 1.2% for its seventh straight gain and the Dow Jones Emerging Markets index added 1.7%. Internally, 32 of the 35 markets in our regular survey were higher. The daily Coppock Curve has a bullish bias for all 35 markets.

Our sense has been that the decline from the early August peak is an intermediate ABC correction that could last well into September and perhaps into early October. In that context, we noted in this past weekend’s STR that the S&P’s gains from the August 28 low was already the largest rally since the August 2 high, which suggested that an a-wave low was in place and that a b-wave rally had begun, with the...
By Walter Murphy on 9/9/2013 3:17 PM
“Plain English”

US Equities: Last week’s action is in line with the scenario outlined in recent comments. The three prior intermediate S&P corrections from (and including) the June 2012 low through the May-June 2013 decline have ranged between 7.5% and 10.9%. A similar performance this time implies a potential further weakness to the 1582-1524 range. In addition, a 38.2% retracement of the 2012-2013 rally suggests support at 1540.

Global Equities: Our daily cumulative advance-decline line for Europe recorded an all-time high. This could bode well for the DJ/STOXX Europe 600 index, which is still below both its recent May and August highs. In addition, the weekly Coppock Curve is currently in an uptrend for both the index and for 10 of the 13 European markets that we regularly monitor.

Interest Rates: The weekly Coppock oscillator has peaked and this new bearish momentum bias can persist through the rest of this year. Thus, last week’s high was not confirmed. We anticipate that a coming decline...
By Walter Murphy on 9/4/2013 3:39 PM
“Plain English”

US Equities: The DJIA decisively reversed its June-August 2013 rally and also violated its 2012-2013 uptrend line. By contrast, the S&P’s July-August rally has not been locked in as a complete pattern; moreover, while its 2012-2013 uptrend line was severely tested, it remains intact. However, the S&P is in a well-defined downtrend from August’s high with a clear lower low and lower high. At the same time, the DJIA’s decline from its early August high has no real definition – it is essentially a straight line from its August 5 high to last week’s low. From the perspective of price and trend, there is something for everybody.

The Rest of the World: The monthly oscillator still has a bullish bias for 15 of 20 developed markets in our survey. However, we expect a majority bearish condition to take hold during September-October. Meanwhile, the weekly oscillator has a bullish bias for most markets. Given the developing longer term pressures, the next intermediate peak could have bearish...
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