Market Pulse
Author: Created: 3/10/2010 11:54 AM
Market Pulse
By Walter Murphy on 1/30/2014 4:02 PM
On Wednesday, the S&P 500 had its fourth decline in five days with a loss of 1.0%. The DJIA had its seventh loss in nine days with a 1.2% setback. Internally, declining stocks exceeded winners by better than 9:2; the up/down volume ratio was bearish by a more modest 7:2 margin. Turnover increased 16%. The daily Coppock Curve has a bearish bias for 22 of the 24 S&P industry groups and for 25 of the 30 DJIA stocks.

Globally, the Dow Jones Global (ex US) Index rallied 0.3% and the Dow Jones Emerging Markets Index gained 0.2%. Internally, however, 22 of the 34 open markets among the 35 non-US markets in our regular survey were lower. The daily Coppock Curve has a bearish bias for 29 of the 35 markets.

Ten-year yields fell seven basis points on Wednesday to 2.68%, which is a level not seen since mid-November. This level is also both chart and Fibonacci support; it represents a 61.8% retracement of the October-December rally.

In our recent STR, we highlighted two scenarios: yields are either engaged...
By Walter Murphy on 1/29/2014 4:26 PM
On Tuesday, the S&P 500 snapped a three-day winning streak with a 0.6% rally. The DJIA broke a five-day losing streak by gaining 0.6%. Internally, advancing stocks exceeded losers by better than 7:2; the up/down volume ratio was bullish by a more robust 9:2 margin. However, volume fell 16%. The daily Coppock Curve still has a bearish bias for 23 of the 24 S&P industry groups and for 26 of the 30 DJIA stocks.

Globally, the Dow Jones Global (ex US) Index rallied 0.2% and the Dow Jones Emerging Markets Index gained 0.4%. Internally, 21 of the 34 open markets among the 35 non-US markets in our regular survey were higher. The daily Coppock Curve has a bearish bias for a 34 of the 35 markets.

It seems that, just over the past week or so, there have been more discussions about emerging markets than we can remember in some time. On the one hand, we agree that lower lows are likely for most markets. On the other hand, while emerging markets, as a group (represented by EM composite indexes), bottomed in late...
By Walter Murphy on 1/27/2014 4:30 PM
“Plain English”

US Equities: Friday was the first 90% down day since August; this could be an important indicator. Since the 2011 low, all 14 90% down days occurred within six days of the end of a correction within an uptrend and 10 of those occurred within two days. By contrast, during the May-October 2011 correction (and the 2007-2009 decline), 90% down days tended to occur within – and confirm – an ongoing downtrend. With this past behavior in mind, if the indexes are able to stabilize within days – if not hours – and quickly rally back through nearby resistance, we will be alert for further strength to new highs.

Global Equities: Last week, much focus was on emerging markets. With that in mind, we note that the Dow Jones Emerging Markets index fell 2.3% while our own equal-weighted index lost a more robust 6.4%. These pressures were fueled by the fact that 13 of the 14 emerging market currencies that we monitor retreated against the US dollar.

Interest Rates: The decline of recent weeks...
By Walter Murphy on 1/24/2014 4:05 PM
On Thursday, the S&P 500 broke a two-day winning streak with a 0.9% loss. The DJIA suffered its third straight loss with a decline of 1.1%. Internally, declining stocks exceeded winners by 10:3; the up/down volume ratio was bearish by a slightly more modest 16:5 margin. The daily Coppock Curve still has a bearish bias for 19 of the 24 S&P industry groups and for 26 of the 30 DJIA stocks.

Globally, the Dow Jones Global (ex US) Index fell 0.6%. Internally, 30 of the 35 non-US markets in our regular survey were lower. This broad-based decline was enough to flip the daily Coppock Curve back to a bearish bias for a majority (21) of the 35 markets.

In recent days, the S&P 500, the NASDAQ, and the Dow Jones Transportation Average all recorded new bull market highs. The glaring exception is the Dow Jones Industrial Average. Strictly speaking, the DJIA has not made a new high since last year (December 31). The importance of this divergence is compounded by the fact that the DJIA has failed to challenge 16783-16810...
By Walter Murphy on 1/23/2014 6:39 PM
On Wednesday, the S&P 500 recorded its second straight gain with a 0.1% rally. By contrast, the DJIA fell for the second straight day with a loss of 0.3%. Internally, advancing stocks exceeded losers by 3:2, carrying the cumulative daily advance-decline line to another all-time high. The up/down volume ratio was bullish by a more modest 11:8 margin. The daily Coppock Curve still has a bearish bias for 15 of the 24 S&P industry groups and for 24 of the 30 DJIA stocks.

Globally, the Dow Jones Global (ex US) Index gained 0.3%. Internally, 23 of the 35 non-US markets in our regular survey were higher. The daily Coppock Curve now has a bullish bias for 21 of the 35 markets.

As noted, the daily Coppock Curve has a bearish bias for most US groups and stocks. Indeed, these pressures have been evident since the beginning of the year. This suggests that we should soon begin to see some improvement; historically, the average trend for the S&P’s daily oscillator has been on the order of 18-20 days. However,...
By Walter Murphy on 1/21/2014 4:37 PM
“Plain English”

US Equities: Even as bearish intermediate pressures build against the S&P and the DJIA, as well as a majority of their components, pressures are also likely to extend to a bearish reversal for US equities relative to global equities and for US stocks relative to US bonds.

Global Equities: Our global daily cumulative advance-decline line is just shy of breaking out to another all-time high. However, the North American and European regional a-d lines have broken out to all-time highs.

Interest Rates: Our sense is that recent weakness is a relatively small degree correction. That said, the weekly oscillator is peaking and sentiment is overbought, so we will be alert for a deeper retracement of the October-December 2.47%-3.04% rally.

Commodities: Oil’s downtrend from September’s high is intact. Moreover, the monthly Coppock Curve is peaking and the currently constructive weekly oscillator may not make it back to its zero line. This, plus our ongoing count that the September...
By Walter Murphy on 1/17/2014 4:12 PM
On Thursday, the S&P 500 fell 0.1% and the DJIA lost 0.4%. However, advancing stocks exceeded losers by 50 issues. The up/down volume ratio was bearish by a 5:4 margin. The daily Coppock Curve still has a bearish 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 fell by less than 0.1% and the Dow Jones Emerging Markets index declined 0.3%. Internally, 19 of the 35 non-US markets in our regular survey were lower. The daily Coppock Curve has a bearish bias for 20 of the 35 markets.

Today’s pullback was sufficient to lock in the rally from Monday’s 1816 low as a complete pattern. Thus, the next few days could be particularly important. We say this because the rally from Monday’s low is positioned to be a third wave within the rally from the December 18 low. So if today’s decline is a pullback within a still-developing third wave, then the next rally should be a “third-of-a-third,” which is often the strongest part of the larger rally (in this...
By Walter Murphy on 1/16/2014 6:09 PM
On Wednesday, the S&P 500 gained 0.5% and the DJIA rallied 0.7%. Advancing stocks exceeded losers by 2:1 while the up/down volume ratio was bullish by a more robust 9:4 margin. Nonetheless, the daily Coppock Curve still has a bearish bias for 18 of the 24 S&P industry groups and for 23 of the 30 DJIA stocks.

The Dow Jones Global (ex US) Index gained 0.4% and the Dow Jones Emerging Markets index rallied 0.2%. Internally, 32 of the 35 non-US markets in our regular survey were higher. However, the daily Coppock Curve has a bearish bias for 23 of the 35 markets.

The S&P eked out all-time highs on both an intra-day and closing basis. By contrast, the DJIA failed to make its own new high and remains well below the 16783-16810 resistance zone we have been highlighting in recent weeks. At the same time, the NYSE all-issue cumulative a-d line is at a new high while the common-stock-only a-d line is only seven issues from its own breakout.

We regularly point out that, as long as breadth makes new highs...
By Walter Murphy on 1/16/2014 6:07 PM
On Tuesday, the S&P 500 had its best day in almost a month with a rally of 1.1%. The DJIA gained 0.7%.  Advancing stocks exceeded losers by better than 4:1 but the up/down volume ratio was bullish by a more modest 19:5 margin. Nonetheless, the daily Coppock Curve still has a bearish bias for 19 of the 24 S&P industry groups and for 25 of the 30 DJIA stocks.

The Dow Jones Global (ex US) Index lost 0.4% and the Dow Jones Emerging Markets index fell 0.2%. Internally, 20 of the 33 open markets in our daily survey of 35 non-US markets were lower. The daily Coppock Curve has a bearish bias for 27 of the 35 markets.

Recently, we have regularly been noting that, even though the S&P 500 has broken through important resistance at 1779-1829, the DJIA has failed to confirm with its own breakout through similarly important resistance at 16783-16810. In recent days, it has become apparent that more important resistance exists a bit higher, at 17263.

Our preferred count is that the DJIA’s October low is...
By Walter Murphy on 1/8/2014 3:08 PM
On Tuesday, the S&P 500 broke a three-day losing streak with a gain of 0.6%. Advancing stocks exceeded losers by 9:3 while the up/down volume ratio was bullish by a more modest 3:2 margin. Turnover increased by 8%. The daily Coppock Curve has a bearish bias for 14 of the 24 S&P industry groups and has a bullish bias for 16 of the 30 DJIA stocks.

The Dow Jones Global (ex US) Index gained less than 0.1% but the Dow Jones Emerging Markets index fell by less than 0.1%. Internally, 20 of the 35 markets in our daily survey were higher; one other was unchanged. The daily Coppock Curve has a bearish bias for 20 of the 35 markets.

In recent weeks our proprietary sentiment index reached a maximum reading of “100” for the first time in its 10 year history. Similarly, the NAAIM “number,” which represents the exposure of active money managers, was above 100 (i.e., fully invested and leveraged) for the third time in its eight year history. Finally, the 10-day CBOE put/call ratio is currently at its most overbought...
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