Market Pulse
Author: Created: 3/10/2010 11:54 AM
Market Pulse
By Walter Murphy on 1/28/2015 3:36 PM
On Tuesday, the NASDAQ fell 1.89%, the DJIA lost 1.65%, and the S&P 500 declined 1.34%. NYSE declining stocks exceeded winners by almost 2:1 while the up/down volume ratio was bearish by a more modest 7:4 margin. Turnover fell by 3%. The daily Coppock Curve has a bullish bias for 399 of the S&P’s 500 stocks, for 15 of the 30 DJIA stocks, and for 82 of the stocks in the NASDAQ 100.

In coming days we will be keeping an eye on at least two reference points – the S&P’s 130-day moving average and that index’s chart support at 1988-1972. In the almost 38 years that we have followed the markets professionally, we have not been a huge fan of moving averages. However, a moving average can prove its mettle and the 130-day ma is one of those examples. This average, which approximates six months, has consistently provided support since late 2012. Indeed, since the important November 2012 low, this moving average has been tested 10 times and has repelled the market pullback nine times. The exception was last year’s...
By Walter Murphy on 1/22/2015 8:49 AM
“Plain English”

US Equities: We led off our recent Year Ahead piece with three charts, each of which highlighted important resistance trend lines. The charts ran the gamut from several years, to more than a decade, to more than a century. It each case, a major index is currently bumping up against an important trend line. These lines have obviously stood the test of time, deserve the benefit of the doubt, and could continue to be a barrier. Conversely, a rally decisively through any of these lines will have bullish implications. The shortest of these is the S&P’s 2009-2015 resistance trend line. During January, the line has been moving through 2072-2086 on its daily chart.

Global Equities: Switzerland’s 13.3% reversal last week may prove to be the canary in the coal mine for Europe. With the DJ STOXX Europe 600 Index arguably near an important top, Switzerland’s SMI’s decline appears to be serious enough to reverse its 2011-2015- uptrend. Most – if not all – important support trend lines have been...
By Walter Murphy on 1/16/2015 2:27 PM
On Wednesday, the DJIA fell 1.06%, the S&P lost 0.58%, and the NASDAQ declined 0.48%. NYSE declining stocks exceeded winners by 5:3 while the up/down volume ratio was bearish by a more robust 2:1 margin. Turnover increased by 7%. The daily Coppock Curve has a bearish bias for 443 of the S&P’s 500 stocks, for 28 of the 30 DJIA stocks, and for 89 of the stocks in the NASDAQ 100.

In recent days we have been focused on the early January low at 1992 as a potential lower degree second wave. Today’s intra-day decline to 1988 obviously means that this count was incorrect, but it does not rule the concept of a still-developing post-December second wave correction. What it does do is change the focus to December’s 1972 low as the next level of support. While a violation of even this level will not by itself rule out the post-December second wave count, it will be viewed as a potentially significant breakdown from a practical point of view. Such a breakdown will complete a top formation and violate conventional and...
By Walter Murphy on 1/12/2015 4:02 PM
“Plain English”

US Equities: Our preferred Elliott Wave count is that the October-December rally is a smallish degree first wave in in larger uptrend. In turn, the December low is the subsequent second wave. Clearly, if this count is correct, then the S&P’s 1992 December low cannot be violated. Indeed, most – if not all – of the major averages should be positioned to break out to new highs. With this in mind, momentum and cycles suggest that pressures will mount as the quarter matures. Thus, if a breakout is to occur, it better happen sooner rather than later.

Global Equities: In previous STRs we indicated that developed markets were likely to have better momentum underpinnings than developing markets into early 2015. That is still the case but we would not be surprised to see momentum take on a bearish bias in February for a majority of the 37 markets. However, there are initial signs that developing markets will be positioned to assume relative strength versus developed markets before the end of...
By Walter Murphy on 1/10/2015 2:59 PM
On Thursday, the S&P gained 1.79% while the DJIA and NASDAQ both added 1.84%. NYSE advancing stocks exceeded losers by a bit more than 5:1 while the up/down volume ratio was bullish by a bit less than 5:1. Total volume was little changed from Wednesday’s level. The daily Coppock Curve has a bullish bias for 193 of the S&P’s 500 stocks, for 13 of the 30 DJIA stocks, and for 42 of the stocks in the NASDAQ 100.

Our attention in recent days has primarily been focused on two areas: the S&P 500 and the euro. As for the S&P, we think that there is a very good case to be made that the entire pattern from the December 5 high to the January 6 low is the second wave following the earlier October-December rally. In Elliott Wave parlance, this second wave is called a “running flat,” which is a sign of strength. If this is correct, strength of the past two days suggest that the index is in the early stages of a third wave that will carry decisively through 2092-2095 on the way to substantial new highs.

Meanwhile,...
By Walter Murphy on 1/5/2015 3:17 PM
“Plain English”

US Equities: An intermediate peak in the first half of 2015 could act like a set of dominoes. A bearish reversal by the weekly Coppock oscillator in the first part of the year will put it in sync with the already deteriorating monthly indicator. In turn, this could intensify the pressures on the increasingly fragile quarterly Coppock guide. Finally, a deteriorating quarterly will reignite the downtrend in the maturing annual oscillator. Meanwhile, seasonal/cycle influences also suggest that the best part of 2015 will be in the first 6-7 months. If so, then second half pressures may well determine whether or not the S&P 500 has the first loss for a year ending in “5” in its history.

The Rest of the World: 2015 begins with the monthly Coppock Curve having a bearish bias for a majority of our 37 markets. Meanwhile, the quarterly indicator is likely to see increased pressures in the second half, while the currently constructive weekly oscillator is positioned for a majority bearish reversal...
By Walter Murphy on 12/29/2014 5:23 PM
Last week, the S&P gained 0.88%, the DJIA added 1.40%, and the NASDAQ rallied 0.87%. During the week, the two senior averages achieved all-time highs and the NASDAQ recorded a 2009-2014 recovery high. NYSE weekly advancing stocks exceeded losers by 2:1.

There is an old saying that “close only counts in horseshoes and hand grenades.” To that we can add market analysis. We say this because, while the S&P 500 finished last week at an all-time high, only three of its components were able to do the same. However, if we widen our examination to include those stocks that came close – i.e., within 2% of a 52-week high – more than half (266) fit the bill. Similarly, 396 of the 500 stocks are above their 200-dma and 423 are benefiting from a constructive weekly Coppock Curve.

These broad-based constructive underpinnings help explain why breadth is constructive. Indeed, the daily cumulative advance-declines lines for the S&P 500 (large cap), 400 (mid cap), and 600 (small cap) indexes have all recently broken...
By Walter Murphy on 12/21/2014 7:37 PM
On Wednesday, the S&P gained 2.04%, the DJIA added 1.69%, and the NASDAQ rallied 2.12%. NYSE advancing stocks exceeded losers by 16:1 while the up/down volume ratio was bullish by better than 14:1. This surge caught the Coppock configuration by surprise; the daily oscillator has a bullish bias for only 123 of the S&P’s 500 stocks, for 5 of 30 DJIA stocks, and for 11 of the stocks in the NASDAQ 100.

Despite the lagging Coppock Curves, Wednesday’s rally may prove to be important because of its internal strength. The above NYSE breadth and volume levels resulted in the first 90% up day since the important 2013 low. Lest we think that breadth was heavily influenced by large caps at the expense of small caps (or vice versa) it is important to note that Wednesday was a 90% breadth day for the S&P 500 large cap, S&P 400 mid cap, and S&P 600 small cap indexes. Finally, the 10-Zweig breadth ratio fell to below 40.0 earlier this week, so the set-up is now in place for a Zweig Breadth Thrust.

...
By Walter Murphy on 12/15/2014 4:47 PM
“Plain English”

US Equities: From an Elliott Wave perspective, it is fairly easy to count the S&P’s post-October rally as a five wave pattern and the current decline as an overlapping counter-trend pattern. This combination suggests that the current decline should prove to be a correction within a larger uptrend. However, momentum remains weak, sentiment is overbought, and minimum 38.2% retracements have yet to be achieved.

Global Equities: The global post-July downtrend appears to have resumed. This suggests a possible – if not probable – test of the Dow Jones Global (ex US) World Index’s October low near 217. With that in mind, the 217-209 range has proved to be both important support and important resistance over the past five years. Thus, if the current decline decisively breaks 217, current support will likely become new resistance.

Interest Rates: The potential for an improving weekly Coppock oscillator suggests that the early weeks/months of 2015 will have a bullish bias for US yields....
By Walter Murphy on 12/11/2014 4:41 PM
On Wednesday, the S&P fell 1.64% to 2026, the DJIA lost 1.51% to 17533, and the NASDAQ retreated 1.73% to 4684. NYSE declining stocks exceeded winners by 12:1 while the up/down volume ratio was bearish by more than 15:1. The daily Coppock Curve has a bearish bias for 415 of the S&P’s 500 stocks, for 24 of 30 DJIA stocks, and for 88 of the stocks in the NASDAQ 100.

Today’s S&P decline was the largest since October 13 and the NYSE breadth ratio was the fifth most negative of the year. Globally, the Dow Jones Global (ex) US Index has had only 15 larger losses this year. This, plus overbought sentiment and intermediate momentum indicators, suggests that still lower lows are in the offing.

That said, we are paying attention to three indexes.

1) The S&P 500 is approaching potentially important chart support and a 23.6% retrace of the October-December rally at 2020-2018. Beyond that range, a break of 2003 will allow for further weakness toward a 38.2% retracement at 1983.

2) The NYSE Composite...
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