Market Pulse
Author: Created: 3/10/2010 11:54 AM
Market Pulse
By Walter Murphy on 6/30/2015 11:36 AM
On Monday, the S&P 500 fell 2.09%, the DJIA lost 1.95%, and the NASDAQ retreated 2.40%. NYSE declining stocks exceeded winners by almost 20:1, and the up/down volume ratio was bearish by more 18:1. The result was the first 90% down day since December. The daily Coppock Curve currently has a bearish bias for 389 of the S&P’s 500 stocks, 23 of the 30 DJIA stocks, and 87 of the stocks in the NASDAQ 100.

In recent comments we have noted that our immediate focus is on 2135-2163 resistance and 2040 support. So in that sense, today’s decline to as low as 2058 still allows the S&P 500 some wiggle room for further weakness. Even so – and as noted in Thursday’s blog – the S&P 500 has violated every important support trend line from the October low even as both the McClellan (Ratio Adjusted) Summation Index and our own Tech Tab indicator have moved below their respective “zero” lines for the first time since October. With these mounting pressures in mind, an S&P 500 break of 2040 support will effectively lock in the...
By Walter Murphy on 6/27/2015 8:54 AM
The daily Coppock Curve currently has a bullish bias for 296 of the S&P’s 500 stocks, 23 of the 30 DJIA stocks, and 62 of the stocks in the NASDAQ 100. Moving up one degree of trend, the weekly oscillator is in a downtrend against 345 of the S&P 500 stocks, 20 of the DJIA components, and 67 of the NASDAQ 100 members

We can make a case that the uptrend from last October’s low is on the ropes. There are several reasons for this observation. For example, the S&P 500 has violated every important support trend line from the October low. Similar trend line breaks are also evident against most other indexes as well as against both the NYSE all-issue and common stock daily cumulative advance-decline lines. In addition, both the McClellan (Ratio Adjusted) Summation Index and our own Tech Tab indicator have moved below their respective “zero” lines for the first time since October. All of these – and others – indicate that the eight-month uptrend is in trouble. Further weakness resulting in a decline by the weekly...
By Walter Murphy on 6/18/2015 2:58 PM
On Wednesday, the S&P 500 gained 0.20%, the DJIA rallied 0.17%, and the NASDAQ rose 0.18%. NYSE advancing stocks exceeded losers by 6:5 while the up/down volume ratio was bullish by a more robust 3:2 margin. The daily Coppock Curve has a bullish bias for 342 of the S&P’s 500 stocks, 20 of the 30 DJIA stocks, and 54 of the stocks in the NASDAQ 100.

In our recent STR, we noted that, during the past month, over 64% of the stocks in the S&P 1500 were, at one time or another, at least 10% below their 52-week high even as the index itself has been well-contained within a narrow trading range. As a result, we reiterated a point that we have been making, i.e., the market may be experiencing a rotational (“stealth”) correction.

Ratcheting that observation down to just the S&P 500, we find that “only” 270 (54%) of its components were more than 10% below their 52-week high at least once over the past month. On the surface, this indicates that the big cap stocks have not suffered as much as their smaller cap...
By Walter Murphy on 6/17/2015 9:39 AM
“Plain English”

US Equities: With the importance of the post-October rally in mind, we note with more than passing interest that the recent weakness has caused the market to do things that haven’t occurred since last October. For example, the McClellan Summation Index is below its neutral zero line for the first time since just after last October’s low. Our Tech Tab indicator and our proprietary bullish sentiment index are also both at low levels last seen last October. Both the NYSE all-issue and common-stock daily cumulative advance-decline lines have broken down from top formations and have breached their respective post-October uptrend lines. Similarly, the S&P and DJIA have broken all of their post-October support lines. All of this suggests that the eight-month uptrend is in trouble.

Global Equities: Our global daily cumulative advance-decline line was down for the week, as were our European, Asia Pacific, and Latin America regional a-d lines. The global a-d line has broken down from a top...
By Walter Murphy on 6/11/2015 3:23 PM
On Wednesday, the S&P 500 gained 1.20%, the DJIA rallied 1.33%, and the NASDAQ rose 1.25%. NYSE advancing stocks exceeded losers by 11:2 while the up/down volume ratio was bullish by a slightly more modest 9:2 margin. The daily Coppock Curve has a bullish bias for 246 of the S&P’s 500 stocks, 17 of the 30 DJIA stocks, and 44 of the stocks in the NASDAQ 100.

A case can be made that today’s rally had a number of things providing the set-up. In no particular order, the S&P was challenging its 130-day ma, the McClellan Summation Index was below its neutral zero line for only the second time since September 2013, the Zweig 10-day breadth thrust ratio was 0.402 (just above the ideal oversold of 0.400), the S&P’s RSI(8) was below 40 for the eighth time (and below 30 for the fourth time) since October, and the 10-day CBOE put/call ratio was oversold for the first time since April.

All of these individually could be considered the prelude to a rally. Together, the group was more compelling. As a result, the...
By Walter Murphy on 6/8/2015 6:18 PM
“Plain English”

US Equities: The NYSE cumulative daily a-d lines are at risk of decisively breaking down from a top formation. This deterioration is also reflected by the fact that the a-d lines are on the verge of penetrating multi-year support trend lines and the McClellan Summation Index is positioned to fall below its neutral zero line for the first time since last October. The fact that almost three times as many stocks are at least 10% away from their highs as those that are within 2% is further evidence of internal weakness,

Global Equities: Among the 37 markets in our weekly survey, three – Argentina, Brazil, and Russia – are more than 10% below their 52-week high and several others are in the 9%-10% range. By contrast, only four are within 2% of their high. This, plus the fact that our global and regional cumulative daily a-d lines are deteriorating, suggests that the Dow Jones index’s post-January uptrend is being reversed.

Interest Rates: A review of the monthly Coppock Curves for...
By Walter Murphy on 6/4/2015 12:24 PM
On Wednesday, the S&P 500 gained 0.21%, the DJIA rallied 0.36%, and the NASDAQ rose 0.45%. NYSE advancing stocks exceeded losers by 5:3 while the up/down volume ratio was bullish by a slightly more modest 11:10 margin. However, the daily Coppock Curve has a bearish bias for 339 of the S&P’s 500 stocks, 26 of the 30 DJIA stocks, and 63 of the stocks in the NASDAQ 100.

As noted, the daily Coppock Curve has a bearish bias for fully 339 (67.8%) of the stocks in the S&P 500. Similarly, the oscillator has a bearish bias for 17 (70.8%) of the index’s 24 industry groups. However, this may actually be a good thing. A review of the daily chart of the S&P, along with the number of groups experiencing a deteriorating Coppock Curve, shows that “20” is an important threshold. Moreover often than not, when at least 20 groups have a bearish momentum bias, momentum has hit a bottoms-up oversold extreme and the index is positioned to begin – or extend – a rally of at least intermediate importance. As the number of groups...
By Walter Murphy on 6/1/2015 2:24 PM
“Plain English”

US Equities: We will be watching chart, Fibonacci, and trend resistance levels in the days and weeks ahead. Chart and Fibonacci resistance for the S&P 500 is apparent at 2119-2150. Within this range, 2119-2135 has been repelling rally attempts since late February; 2150 is the point at which the pattern from the early February low is 61.8% of the previous October-December rally. As for trend resistance, the most forgiving resistance trend line connects the early December high (the peak of the initial surge off of the October low) with the late February high (the end of the rally from the early February low). This line is currently at 2168.

Sectors: The rally from the late 2014 lows can be counted as a final Elliott Wave fifth wave from at least 2011 for most of the S&P’s 10 economic sectors. Energy and Utilities are the most obvious exceptions.

The Rest of the World: The monthly Coppock Curve had a bullish bias for 19 of the 37 markets at the end of May. Indications are that...
By Walter Murphy on 5/27/2015 6:25 PM
On Wednesday, the S&P 500 gained 0.92%, the DJIA rallied 0.67%, and the NASDAQ rose 1.47%. NYSE advancing stocks exceeded losers by 11:4 while the up/down volume ratio was bullish by a slightly more modest 8:3 margin. The daily Coppock Curve has a bullish bias for 291 of the S&P’s 500 stocks, only 10 of the 30 DJIA stocks, and 76 of the stocks in the NASDAQ 100.

In recent comments we have emphasized the fact that breadth is constructive. This is currently reflected by the fact that the cumulative daily advance-decline lines for both the S&P 500 (large cap) and S&P 400 (mid cap) indexes recently made new highs. The a-d line for the S&P 600 (small cap) index barely missed making a new high, but this near miss did not prevent the a-d line for the broad S&P 1500 from recording its own new all-time high. As long as breadth is “in gear” with the popular averages, it is unlikely that the market will experience a major decline.

On-balance volume (OBV) is also viewed favorably. As noted in the glossary...
By Walter Murphy on 5/22/2015 4:23 AM
On Wednesday, the S&P 500 fell 0.09% and the DJIA lost 0.15%, but the NASDAQ rose 0.03%. NYSE advancing stocks exceeded losers by less than 70 issues. The daily Coppock Curve has a bullish bias for 371 of the S&P’s 500 stocks, 20 of the 30 DJIA stocks, and 81 of the stocks in the NASDAQ 100.

We have regularly noted that, as long as breadth is “in gear” with the popular averages, it is unlikely that the market will experience a major decline. In “Plain English” we want to see the NYSE daily cumulative advance-decline line confirm new highs in the S&P 500 and DJIA. Conversely, multi-week or multi-month bearish divergences are often a cause for concern.

With this in mind, both the all-issue and common-stock NYSE a-d lines are in uptrends. The latter made its most recent high earlier this week while the former’s high occurred in late April. That said, there has been some internal deterioration. For example, the a-d lines for only two of the nine sector SPDR’s have made new highs of their own. Fortunately...
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