Market Pulse
Author: Created: 3/10/2010 11:54 AM
Market Pulse
By Walter Murphy on 2/27/2014 3:04 PM
The S&P 500 has been alternating gains and losses for seven sessions and it was Wednesday’s turn for a rally. The index complied with a very modest 0.002% uptick. The DJIA had a more robust 0.1% gain. Internally, advancing stocks exceeded losers by 3:2 while the up/down volume ratio was bullish by a more modest 5:4 margin. Turnover increased by 6%. The daily Coppock Curve has a bullish bias for 17 of the 24 S&P industry groups and for 18 of 30 DJIA stocks.

Globally, the Dow Jones Global (ex US) Index fell 0.5% while the Dow Jones Emerging Markets Index rallied 0.1%. Internally, 20 of the 35 non-US markets in our regular daily survey were lower. The daily Coppock Curve has a bearish bias for 22 of the 35 markets.

As noted, the daily Coppock Curve is showing initial signs of weakness for a majority of global markets. Not surprisingly, this extends to the oscillator associated with the Dow Jones Global (ex US) Index. The indicator is peaking and our initial estimate is that the resulting bearish pressures...
By Walter Murphy on 2/25/2014 12:33 PM
“Plain English”

US Equities: Three months after the S&P’s November Fibonacci breakout, the DJIA has yet to confirm. Indeed, the DJIA’s all-time December high was 16588, which was well short of confirmation. The subsequent January failure to match that December peak – even as the S&P and NASDAQ indexes continued to record bull market highs – is a divergence that bears watching. (Pun intended.)

Global Equities: Commodities have been improving of late and are expected to continue to do so. This has increased the attention on commodity-sensitive equity markets. In that regard, Australia and Canada have garnered most of the attention. However, a review of the 37 markets in our regular weekly survey revealed that Chile and China have had the highest correlations relative to the equal-weighted Continuous Commodity Index over the past year.

Interest Rates: Last week 10-year yields fell one basis point (bp) to 2.73%, breaking a two-week winning streak. As a result of this minimal change, there have...
By Walter Murphy on 2/18/2014 5:57 PM
“Plain English”

US Equities: It is entirely possible that we will see new highs in the S&P while the DJIA remains below long term resistance.

Global Equities: Japan’s Nikkei is on a six-week losing streak and has satisfied the minimum requirements for a complete five-wave rally from the late 2011 low. In turn, this is enough to complete an ABC rally from the early 2009 low. Either way, the index is could well be in the early stages of its most important correction in several years.

Interest Rates: Important support trend lines for 10-year yields from last May’s low have been violated. Our sentiment index is still on the overbought side of neutral. The weekly Coppock Curve for is in a downtrend and the monthly oscillator is peaking. All of this suggests that the decline from December’s high is within a still-developing intermediate-to-primary downtrend and that the recent “strength” is an oversold rally that should be relatively short-lived

Commodities: Fourteen of the 15 commodities...
By Walter Murphy on 2/12/2014 3:45 PM
On Tuesday, the S&P 500 posted its fourth straight gain (and fifth in six sessions) with a rally of 1.1%. The DJIA added 1.2%. Internally, advancing stocks exceeded losers by a bit less than 5:1; the up/down volume ratio was bullish by a similar amount. Turnover increased (by 12%) for the first time in those six sessions). The daily Coppock Curve has a bullish bias for all 24 S&P industry groups and for all 30 DJIA stocks.

Globally, the Dow Jones Global (ex US) Index rallied 1.0% and the Dow Jones Emerging Markets Index gained 0.9%. Internally, 33 of the 34 open non-US markets in our daily 35-country survey were higher. The daily Coppock Curve has a bullish bias for 32 of the 35 markets.

In our recent STR we noted that the S&P’s January pullback was almost exactly 38.2% of its June-January rally. The DJIA retraced 61.8% of its October-January rally. As a result, we said that we should respect the possibility that the post-January downtrend was only an interruption within, but not a reversal of, the...
By Walter Murphy on 2/10/2014 1:10 PM
“Plain English”

US Equities: The recent correction was only a normal Fibonacci retracement of the indexes’ rally from their respective fourth wave lows. For example, the S&P’s pullback was almost exactly 38.2% of its June-January rally. The DJIA retraced 61.8% of its October-January rally. On the surface, therefore, we have to respect the possibility that the post-January downtrend was only an interruption within, but not a reversal of, the rally from the June 2012 low.

Global Equities: We expect momentum pressures to begin to ease beginning later this month, particularly for the developed markets. By contrast, the majority bearish momentum condition for the developing markets could well persist into April. This suggests that, although the larger markets have already been in an uptrend relative to emerging markets for over a year, we should be looking for signs of increased relative strength in favor the developed markets.

Interest Rates: All of the important support trend lines for 10-year...
By Walter Murphy on 2/7/2014 1:30 PM
On Thursday, the S&P 500 had its best day since mid-December with a gain of 1.3%. The DJIA had a similarly strong 1.2% rally. Internally, advancing stocks exceeded losers by 5:1 and the up/down volume ratio was bullish by a more modest 15:4 margin. However, turnover fell 4%. The daily Coppock Curve still has a bearish bias for 17 of the 24 S&P industry groups and for 17 of the 30 DJIA stocks.

Globally, the Dow Jones Global (ex US) Index rallied 1.8% and the Dow Jones Emerging Markets Index gained 1.4%. Internally, 31 of the 33 open non-US markets in our daily 35-country survey were higher. The daily Coppock Curve has a bearish bias for 28 of the 35 markets.

It is quite easy to count the S&P’s hourly rally from yesterday’s low as a five-wave pattern. In addition, the rally has already broken through the downtrend line from the January 22 high. One degree higher, on the daily chart, the daily Coppock Curve appears to have bottomed. All of this indicates that higher highs should be expected.

...
By Walter Murphy on 2/4/2014 3:21 PM
“Plain English”

US Equities: Since we anticipate that the current correction should be a Fibonacci retracement of the rally from at least June 2012, a minimum 38.2% retracement indicates a decline to 1628. If so, this would be a loss of 12%. Thus, while we can anticipate a normal Fibonacci retracement, we should be alert for a loss of value outside of the parameters seen in recent years.

The Rest of the World: The weekly Coppock Curve has a bearish bias for 36 of the 37 non-US markets in our universe; this intermediate majority bearish condition is positioned to remain in place into April. Longer term, the monthly oscillator has a bearish bias for 29 of the 37 markets and is likely to remain under pressure for a majority of the countries until well into 2015. This combination suggests that near- and intermediate-term rallies will be counter to the primary trend in the months ahead.

Yields: Not surprisingly, 30-year yields have a Coppock configuration that is very similar to that for 10’s....
By Walter Murphy on 1/31/2014 4:22 PM
On Thursday, the S&P 500 had its best day of the year with a rally of 1.1%. The DJIA gained 0.7%. Internally, advancing stocks exceeded losers by a bit less than 4:1 while the up/down volume ratio was bullish by a more modest 12:5 margin. Turnover fell 11%. The daily Coppock Curve has a bearish bias for 20 of the 24 S&P industry groups and for 20 of the 30 DJIA stocks.

Globally, the Dow Jones Global (ex US) Index lost 0.7% and the Dow Jones Emerging Markets Index fell by less than 0.1%. Internally, 17 of the 33 open markets among the 35 non-US markets in our regular survey were lower. The daily Coppock Curve has a bearish bias for 31 of the 35 markets.

In last week’s STR, we suggested that most intermediate sentiment indicators are not sensitive enough to respond to a relatively few days of decline. As a result, we thought that this week’s readings might be more telling. And, indeed, there has been some shifting.

For example, the Consensus Inc. bulls indicator has reversed its October-December...
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...
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