Market Pulse
Author: Created: 3/10/2010 11:54 AM
Market Pulse
By Walter Murphy on 4/27/2012 9:30 AM
On Thursday, the S&P 500 posted its third straight gain – and fourth in five days – with a rally of 0.7%. Advancing stocks exceeded losers by 7:3 while the up/down volume ratio was bullish by a more modest 2:1 margin. However, turnover fell for the 11th time in the past 15 days. The daily Coppock Curve has a bullish bias for all 24 S&P industry groups and for 26 of the 30 DJIA stocks.

Globally, the MSCI All-Country Index rallied 0.6%. The Coppock Curve has a bullish bias for 31 of the 35 markets that we follow on a daily basis.

We have been making the case that the S&P’s April 2-10 decline is most likely the “A” wave of a larger ABC decline. That would suggest that the rally since then is a “B” wave. On the surface, today’s apparent strength might suggest that it represents a reversal, not just a counter trend rally. However, several items suggest that the rally of recent days could still give way to a decline that carries to new reaction lows below the recent 1357-1359 double-bottom. Under the surface,...
By Walter Murphy on 4/25/2012 7:40 PM

For arguably the 4th time since the October low, the DJIA has tested its dominant point-and-figure support line.  This successful test has been followed by the first P&F “buy” since March.

The support line is at 12900, but we would prefer to see a break of 12800 in order to decisively violate the line and reverse six-month uptrend.

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By Walter Murphy on 4/25/2012 8:57 AM
On Tuesday, the S&P 500 gained 0.4%. Advancing stocks exceeded losers by 13:5 while the up/down volume ratio was bullish by a more modest 4:3 margin. Turnover fell for the 8th time in the past 10 days. The daily Coppock Curve has a bullish bias for 15 of the 24 S&P industry groups and for 21 of the 30 DJIA stocks.

Globally, the MSCI All-Country Index rallied 0.6%. The Coppock Curve has a bullish bias for 27 of the 35 markets that we follow on a daily basis.

We have been making the case that the S&P’s April 2-10 decline is most likely the “A” wave of a larger ABC decline. The consolidation since the April 10 low is, therefore, the “B” wave. With that in mind, we can make the case that this “B” wave consolidation is not complete. This is bolstered by the fact that the daily Coppock Curve has been stabilizing at oversold levels. In turn, this suggests that the oscillator could well continue to provide a cushion for another week or so. Thus, the “B” wave consolidation would be expected to “hang in there”...
By Walter Murphy on 4/23/2012 11:28 AM
“Plain English”

Stocks: We have been counting the S&P 500’s trading range since the April 10 low as the “B” wave in a larger ABC decline. This means that renewed weakness will likely have a Fibonacci relationship (equality-1.618) to the 65-point April 2-10 “A” wave.

The Rest of the World: The weekly Coppock Curve has a bearish bias for nine of the 10 MSCI global (ex US) economic sectors. These majority pressures are positioned to persist into late June.

Interest Rates: In the same fashion that the weekly Coppock oscillator for equity markets is likely to have a bearish bias into at least late June, momentum for 10-year yields (and for our global yield index) is also likely to be under pressure through most, if not all, of the current quarter.

Commodities: Oil’s downside pressures remain very real. Sentiment is still overbought and weekly (medium term) momentum is weak. As a result, we are alert to the idea that further testing – and even a breakdown – is possible.

US Dollar:...
By Walter Murphy on 4/20/2012 9:15 AM
On Wednesday, the S&P 500 suffered its second straight loss – and fourth in five days – with a decline of 0.6%. Declining stocks exceeded winners by less than 2:1 while the up/down volume ratio was bearish by a bit more than 2:1. Turnover increased by 21%. The daily Coppock Curve flipped to a bearish bias for 15 of the 24 S&P industry groups but remains constructive for 20 of the 30 DJIA stocks.

Globally, the MSCI All-Country Index lost 0.4%. The Coppock Curve has a bullish bias for 28 of the 35 markets that we follow on a daily basis.

The S&P 500’s uptrend from its April 10 low is intact. Moreover, near term momentum is oversold and generally has an upward bias. Thus, our inclination is to give the market the benefit of the doubt and allow for further upside.

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By Walter Murphy on 4/19/2012 4:17 PM
On Wednesday, the S&P 500 suffered its third loss in four days with a decline of 0.4%. Declining stocks exceeded winners by almost 3:1 while the up/down volume ratio was bearish by a more modest 7:3 margin. Turnover increased by only 0.7% but that was enough to end a six-day string of declining volume. The daily Coppock Curve has a bullish bias for 12 of the 24 S&P industry groups and for 18 of the 30 DJIA stocks.

Globally, the MSCI All-Country Index lost 0.2%. The Coppock Curve has a bullish bias for 25 of the 35 markets that we follow on a daily basis.

The S&P 500 large cap index has outperformed the S&P small cap index since early February. Over that time, the “500” gained 4.5% while the “600” declined 0.7%. However, there are indications that this is about to change. For instance, the daily Coppock Curve for the 500/600 relative is peaking. But perhaps more importantly, the Bullish Percent Index (BPI) for the “500” relative to the BPI for the “600” is making year-to-date lows.

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By Walter Murphy on 4/18/2012 9:07 AM
On Tuesday, the S&P 500 recorded its second best gain of the year with a rally of 1.5%. Advancing stocks exceeded losers by better than 7:1 and the up/down volume ratio was bullish by a similar margin. Turnover fell by only 0.6% but this was enough for a sixth straight decline. Meanwhile, the daily Coppock Curve improved and now has a bullish bias for 14 of the 24 S&P industry groups and for 19 of the 30 DJIA stocks.

Globally, the MSCI All-Country Index rallied 1.4%. The Coppock Curve now has a bullish bias for 23 of the 35 markets.

Tuesday’s rally is a confirmation that the early April decline from 1422 to 1357 has been reversed. There are several reasons for this observation. The resistance trend line from the April 2 high has been penetrated, the rally itself is composed of a higher high and a higher low, and near term momentum (which is still oversold) has bottomed for a majority of the industry groups and has the potential to maintain this bullish bias into May.

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By Walter Murphy on 4/16/2012 2:27 PM
“Plain English”

Stocks: Despite the deterioration in the indicators, the S&P has only managed to test – but not decisively violate – its post-October trend line. Since price is the ultimate arbiter, we have to respect the notion that the S&P’s intermediate uptrend is still intact, indicator weakness notwithstanding.

The Rest of the World: Pressures are likely to build in coming weeks and be broad-based on both a country basis and a sector basis.

Interest Rates: In the same fashion that the weekly Coppock oscillator for equity markets is likely to have a bearish bias into at least late June, momentum for 10-year yields (and for our global yield index) is also likely to be under pressure through most, if not all, of the current quarter.

Commodities: Gasoline’s rally trend from its late 2011 low is still intact. In that regard, we can count the weakness of recent days as an Elliott Wave fourth wave with a final fifth wave to new multi-year highs still to come.

US Dollar: The dollar...
By Walter Murphy on 4/13/2012 9:23 AM
On Thursday, the S&P 500 recorded its second straight broad-based rally with a gain of 1.4%. Advancing stocks overwhelmed losers by almost 9:1 while the up/down volume ratio was bullish by almost 10:1. As a result, Thursday just missed being the second 90% up day of 2012. Turnover, which fell by 6%, was more than 24% below Tuesday’s peak. Thus, neither Wednesday nor Thursday was a traditional accumulation day. Meanwhile, the daily Coppock Curve still has a bearish bias for 19 of the 24 S&P industry groups and for 21 of the 30 DJIA stocks.

Globally, the MSCI All-Country Index rallied 1.3%. The Coppock Curve has a bearish bias for 20 of the 35 markets.

The scope of the S&P’s rally over the past two days has effectively locked in the April 2-10 decline as a corrective structure. This effectively leaves us with two choices: the decline was either 1) the “A” wave of a larger ABC correction or 2) a brief pause within the still unfolding post-October uptrend. Of the two, the weight of the evidence favors...
By Walter Murphy on 4/11/2012 12:54 PM
On Tuesday, the S&P 500 recorded its fifth straight decline – and did so with gusto. The 1.7% decline was the largest setback – and second largest change in either direction – of the year. At the same time, turnover increased by 49% to its second highest level of 2012. Declining stocks overwhelmed winners by almost 14:1 while the up/down volume ratio was bearish by a bit less than 13:1. The result was the second 90% down day of the year. The daily Coppock Curve has a bearish bias for every one of the 24 S&P industry groups and for 28 of the 30 DJIA stocks. All told, Tuesday was, by virtually any definition, a decisive distribution day.

The pressures were global in scope as 30 of the 35 non-US markets that we monitor on a daily basis recorded a loss. As a result, the MSCI All-Country Index fell 1.5% and recorded its sixth straight decline. The Coppock Curve has a bearish bias for 32 of the 35 markets.

The S&P’s decline from the April 2 high is already the largest correction since the 134-point October-November...
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