Market Pulse
Author: Created: 3/10/2010 11:54 AM
Market Pulse
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...
By Walter Murphy on 5/18/2015 1:52 PM
“Plain English”

US Equities: The S&P and DJIA continue to be contained by the multi-year resistance trend lines that we have regularly highlighted in recent reports. For reference, the S&P’s resistance line will be trending through 2141-2147 through the rest of May and the DJIA’s will be rising through 18885-18934. A breakout through trend line resistance will allow for further strength to challenge Fibonacci resistance at 2180-2213 for the S&P and 20603-20769 for the DJIA.

Global Equities: The weekly Coppock Curve has a bearish bias for most individual markets and this configuration is likely to persist into the third quarter. Meanwhile, the daily oscillator is in an uptrend for most markets. This near term bullish bias is likely to peter out by early June if not sooner. Thus, it seems likely that the recent strength – and any nearby rally attempts – will prove to be a short term event in the context of deteriorating intermediate and primary trend conditions.

Interest Rates: The April-May...
By Walter Murphy on 5/14/2015 3:02 PM
On Wednesday, the S&P 500 fell 0.03% and the DJIA lost 0.04%, but the NASDAQ rose 0.11%. NYSE advancing stocks exceeded losers by 25 issues while the up/down volume ratio was bullish by a more robust 7:6 margin. The daily Coppock Curve has a bearish bias for 275 of the S&P’s 500 stocks, 14 of the 30 DJIA stocks, and 66 of the stocks in the NASDAQ 100.

In recent weeks there has been a good deal of attention focused on the bond market as 10-year yields have risen from 1.65% in late-February to 2.34% earlier this week. (Over that same span, 30-year yields increased 2.23% to 3.10%.) While, this surge (68 basis points in 70 days for 10’s) has generated questions and has caused some to “call” a major reversal, it is so far nothing to write home about. A number of greater surges have occurred over the years (including three stronger ones just since 2009).

That said, the secular downtrend has been in force since 1981 and is very deep into our Elliott Wave count. So, in the context of a 34-year trend, a significant...
By Walter Murphy on 5/11/2015 4:05 PM
“Plain English”

US Equities: The DJIA has become easier to count than the S&P 500. Regardless, it is virtually impossible to interpret the post-October rally for either index as a standard impulse wave. The “choppy,” overlapping nature of the rally indicates that it is corrective. This, in turn, implies that it is a diagonal triangle, which is an ending pattern. In non-Elliott Wave parlance, this is a bearish wedge.

Global Equities: All of last week’s global gains can be attributed to Friday’s rally. The Dow Jones World (ex US) Index gained 1.46% to 243.01 on Friday, which was its second-best performance of the year. This allowed the index to contain recent weakness to a 38.2% retracement of its March-April rally and hold just above 237-236 chart support. Anticipated renewed weakness (based on the weekly Coppock configuration) could bring 232-231 into focus; this range is both point-and-figure and 2009-2015 trend support.

Interest Rates: We continue to believe that the end of the current primary...
By Walter Murphy on 5/7/2015 3:57 PM
On Wednesday, the S&P 500 fell 0.45%, the DJIA lost 0.48%, and the NASDAQ declined 0.40%. NYSE declining stocks exceeded winners by 4:3 while the up/down volume ratio was bearish by a more robust 2:1 margin. The daily Coppock Curve has a bearish bias for 365 of the S&P’s 500 stocks, 24 of the 30 DJIA stocks, and 85 of the stocks in the NASDAQ 100.

Interestingly enough, “the market” may not have has had as difficult day as the headline averages suggest. For example, even though the “500” fell 0.45%, the mid-cap S&P 400 lost a much more modest 0.02% and the small-cap S&P 600 rallied 0.21%. Similarly, breadth for the “500” was negative for the day, but was positive for the other two S&P indexes (by increasingly wider margins). So even though the broad S&P 1500 hit a four-week low during the week, many stocks held up quite well.

With that in mind, the daily Coppock Curve currently has a bearish bias for 1079 of the stocks in the 1500, but these near term pressures are positioned to abate by late next...
By Walter Murphy on 5/4/2015 6:03 PM
“Plain English”

US Equities: The market is contending with underlying “stealth” deterioration even with the recent new highs. To place this in a larger context, the 40% of the stocks in the broad S&P 1500 that were at least 10% below their 52-week closing high at the end of April compares unfavorably with 34% at the end of 2014 and only 23% at the end of 2013. Corrections are usually preceded by deterioration in the market’s internals. This, plus our mature Elliott Wave count along with deteriorating momentum, overbought sentiment, and time/seasonal considerations suggests that the 2011-2015 uptrend is increasingly fragile.

The Rest of the World: The Dow Jones Global (ex US) Index’s weekly oscillator is peaking and the same can be said for the Europe and Asia-Pacific regional indexes. By contrast, the currently constructive weekly indicator for Latin America may not peak until late June or July; internally. However, the deterioration in individual markets suggests that the internal weakness is more...
By Walter Murphy on 4/30/2015 2:18 PM
On Wednesday, the S&P 500 fell 0.37%, the DJIA lost 0.41%, and the NASDAQ declined 0.63%. NYSE declining stocks exceeded winners by 9:4 while the up/down volume ratio was bullish by a more modest 5:4 margin. The daily Coppock Curve has a bearish bias for 329 of the S&P’s 500 stocks, 19 of the 30 DJIA stocks, and 65 of the stocks in the NASDAQ 100.

Also on Wednesday the US Dollar Index fell 0.94% to 95.19. This was the index’s sixth consecutive daily decline, which is tied for the longest losing streak since May 2011. The decline could have been worse but for a dollar rally against the Japanese yen, which is the index’s second most-heavily weighted component. Even so, the current weakness has been enough to reverse the uptrend from last July’s 79.74 low.

We have been counting the post-July uptrend as the third wave within a larger five-wave rally from last May’s 78.91 low. If so, then it stands to reason that the recent weakness marks the beginning of the fourth wave. This fourth wave could retrace...
By Walter Murphy on 4/29/2015 6:26 AM
“Plain English”

US Equities: The NASDAQ, which finished last week at a record 5092, is pulling away from its long-standing resistance trend line, which is now at 4935. This 3.19% spread is the largest in the 63-month existence of the line and suggests that may prove to be a support line in the weeks ahead. With that last point in mind, the line will be cutting through 4937-4964 between now and mid-May.

Global Equities: The recent strength in our Latin America cumulative daily a-d line is reflected in the Dow Jones Latin America Index. This index has rallied over 16% since mid-March to its current 517 and is on the verge of completing a base. Further strength through 524 will complete the base and allow for a challenge of at least 545.

Interest Rates: The weekly Coppock Curves for both 10- and 30-year yields have been in a downtrend since 2013 and have been below the neutral zero line since 2014’s first quarter. Both oscillators have a bullish bias, but this is expected to dissipate next month...
By Walter Murphy on 4/23/2015 2:14 PM
On Wednesday, the S&P 500 gained 0.51%, the DJIA rallied 0.49%, and the NASDAQ added 0.42%. NYSE advancing stocks exceeded losers by 8:5 while the up/down volume ratio was bullish by a more robust 12:5 margin. The daily Coppock Curve has a bullish bias for 277 of the S&P’s 500 stocks, 22 of the 30 DJIA stocks, and 74 of the stocks in the NASDAQ 100.

In a recent comment we noted that the path of least resistance for the S&P 500 appeared to be down. This reflected the fact that the indexes were struggling to mount a sustained rally, but declined with relative ease. One way we examine this is to monitor the number of up days by the S&P over a running 21-day period. Uptrends regularly see surges where the index periodically is up 15-17 times over a 21-day span. (By contrast, downtrends rarely exceed 15 declines over the same span.)

So far this year we have yet to see as many as 15/21 up days. The highest reading so far (13/21) occurred along with February’s rally. By contrast, last year’s October-December...
By Walter Murphy on 4/10/2015 3:00 PM
On Thursday, the DJIA gained 0.31%, the S&P 500 rallied 0.45%, and the NASDAQ added 0.48%. However, NYSE declining stocks exceeded winners by 9:8 while the up/down volume ratio was bullish by a 4:3 margin. The daily Coppock Curve has a bearish bias for a majority (258) of the S&P’s 500 stocks but has a bullish bias for 16 of the 30 DJIA stocks and for 55 of the stocks in the NASDAQ 100.

In recent comments, we have highlighted both the post-October support trend lines and the 130-day moving average as important indicators of the S&P’s intermediate uptrend. (For reference, the trend line is currently at 2081 and the moving average is at 2038.) Our sense has been that, as long as the S&P does not decisively penetrate these dynamic support indicators, the post-October uptrend deserves the continued benefit of the doubt.

We have also been monitoring the new high / new low ratio. This indicator is derived by dividing the difference between NYSE new 52-week highs and new lows by the total number of issues...
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