Market Pulse

STR Bullets

Feb 22

Written by:
2/22/2016 4:57 PM  RssIcon

“Plain English”

US Equities: In October of last year, the difference between the Bullish Percent Index for the DJIA and the BPI for the NYSE Composite reached its highest spread in the 15 years of data at our disposal. While the spread has narrowed since October, it remains near historic highs. This suggests that the generals are further out in front of the troops than they were in 2007 or 2001.

Global Equities: Intermediate pressures are easing. The weekly Coppock Curve has bottomed for developing markets and we expect it to do the same for developed markets very soon. The resulting intermediate bullish bias should persist into May.

Rates: The weekly Coppock Curves for both US 10- and 30-year yields have a bearish bias but they are positioned to begin bottoming in April. Much the same can be said for yields in a majority of the six countries in our global index.

Commodities: Copper’s weekly Coppock oscillator is in an uptrend and has the potential to remain constructive into April. However, the monthly indicator is engaged in a bottoming process so we will likely still need to wait for the next weekly Coppock low before copper is properly positioned for a sustainable long term rally.

US Dollar: Our preferred Elliott Wave count is that the euro has been – since August – in the C-wave of an intermediate ABC downtrend from its May 2014 high. However, the euro’s weekly and monthly Coppock oscillators are both constructive. This, combined with the fact that the euro has so far failed to challenge €1.046, suggests that it may still only be in the A-wave. This would not change our view that a coming rally will challenge chart and Fibonacci resistant related to the entire post-2014 downtrend. It would, however, mean that the primary downtrend will require more time and price erosion than was originally anticipated before it is complete.

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