analysis as of April 2, 2013 by Walter Murphy, retired elliottician from Merrill Lynch
10x3 --- the S&P 500 Point and Figure chart since the November low:
Wave 1 = 9 boxes on the Point and Figure chart,
Wave 3 = 13 boxes,
Wave 5 currently at 8 boxes as of the April 2, 2013 close
* with very little effort I can count today's rally as kick-off for 5-of-5-of-5 from the November low.
* Wave 5 rally from 3/19 will equal the 2/25-2/28 (wave 1) rally at $1577.72.
** Date: Tue, Apr 2, 2013 at 5:13 PM --
any future decline Below SPX $1538 reverses the post-November uptrend
NOTE - the April 1st volume = the 2nd lowest of the year -- and lower than 2012's Easter Monday------------
The Troops are Retreating Apr 2
4/2/2013 4:25 PM
On Monday, the S&P 500 continued its recent habit of alternating up and down days with a decline of 0.5%. This string of alternating sessions has reached nine days. Declining stocks edged out winners by a bit less than 4:1 while the up/down volume ratio was bearish by a more modest 10:3 margin. Turnover fell by 15% to its second lowest level of the year. The daily Coppock Curve has a bearish bias for 17 of the 24 S&P industry groups and for 21 of the 30 DJIA stocks.
The MSCI World (ex US) Index lost 0.5%. The daily Coppock Curve has a bearish bias for 25 of the 35 non-US markets in our regular survey.
There is an old maxim in market analysis that when the generals (e.g., the DJIA) are leading and the troops (small cap stocks) are following, the relevant uptrend is in trouble. We mention this because it appears that the troops are currently in full retreat.
On Monday, the S&P 600 Small Cap Index fell 1.2% and, as a result, broke down from a two-week trading range. This range can be described as a top formation. More importantly, the “600” has also broken down relative to the DJIA. Indeed, this relative breakdown completes a head-and-shoulders top formation that traces its origins back to late December. These breakdowns, coupled with daily and weekly Coppock Curves that are overbought and deteriorating for the “600” in both absolute and relative terms, suggests that the troops will continue to retreat in the weeks ahead. In that regard, it is also important to note that the daily oscillator currently has a bearish bias for 503 of the 600 stocks in the Small Cap Index. This does not bode well for the post-November rally.
S&P 600 Relative to the DJIA