Market Pulse

STR Bullets

Apr 19

Written by:
4/19/2016 2:33 PM  RssIcon

“Plain English”

US Equities: While most of the evidence in the daily charts suggests that this rally has a corrective structure, we still need to see a pullback on the weekly charts that is sufficiently deep to reverse the rally and lock in a countable pattern. Given that the S&P and DJIA have both posted higher lows on their weekly charts for nine straight weeks, definition to the Elliott Wave structure is still lacking. A decline nicely through S&P 2040 and/or DJIA 17554 during the coming week will break the string of higher lows and lock in the February-March rally as a complete pattern.

Global Equities: At the end of last week the weekly Coppock oscillator was constructive for 36 of the 37 markets. The exception is Indonesia. However, 24 of the 35 markets that we follow on a daily basis are still at least 10% below their 52-week high. Nonetheless, the intermediate majority bullish momentum condition is positioned to continue into late May.

Rates: The March-April decline by US 10-year yields has reversed – and retraced more than 61.8% of – the earlier February-March rally. This indicates that the larger downtrend from last June’s 2.49% high is still holding sway. This, together with Fibonacci relationships and the weekly/monthly Coppock configuration, indicates that 2012’s all-time low at 1.39% remains at risk of being challenged.

Commodities: We had been counting oil’s sell-off since last summer as the final fifth wave within the post-2013 decline from 110. This final wave had been extending and developing five smaller degree waves of its own. The recent rally through the downtrend lines from last year’s high near 61 and 2014’s high near 107 is evidence that this fifth wave and, therefore, the entire post-2013 (C)-wave decline is complete. Last week’s rally back through 41.67 bolsters the importance of this reversal.

US Dollar: Since last August the euro has arguably been in the Elliott Wave C-wave of an intermediate ABC downtrend from its May 2014 high. However, the corrective rally trend since last December’s €1.054 low is still intact and has retraced well more than 61.8% of the August-December decline in terms of both price and time. This increases the possibility of still higher recovery highs toward €1.171.

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