Market Commentary: SP500 down -0.65%, largest Drop In Five Weeks

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Closing Market Commentary For 09-09-2014

Markets moved steadily downward after reaching the 2 pm high where the $NDX briefly saw green. The $RUT dipped below – 1.0%, SP500 off 0.65% with the other averages falling below 80% and 60% on moderate volume.

By 4 pm the averages were in the red on moderate volume with a last minute green spike from the BTFDers that think this melting won't continue tomorrow. I think the bull has taken a short nap.

Follow up:

I am still not ready to short the market, but I have my finger poised over the execution button just in case the bull doesn't wake up. Mr. Market may be pausing to get his breath, consolidating or whatever before moving on higher and I am not going to guess.

“The daily stochastics support a pullback in the days ahead, but we think it will be short-lived and will present another buying opportunity,” said Katie Stockton, chief technical strategist at BTIG, in emailed comments this morning.

It isn't like we haven't told you so. Now the acclaimed PEW Research backs up our claims. As for the sell off today, it remains to be seen if we will have more than a 3% or 4% 'correction'. When the market reach that point there will be some serious soul searching among investors whether it is worth the aggravation and loss of sleep of staying long.

Most countries still think their economy is lousy: Pew poll

It’s been a little over six years since the wheels started falling off the global economy, and while stock markets are up and unemployment is down in many countries, most citizens are still stuck in a mire of doom and gloom.

Whether it was an advanced, emerging, or a developing economy, respondents in most countries took a dim view of their economic situation, according to a Pew Research poll conducted from March to June.

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The medium term indicators are leaning towards the hold side at the close. The all important signs of reversal, up or down, have not been observed so we are mostly, at best, neutral and conservatively holding. The important DMA's, volume and a host of other studies have not turned and that is not enough for me to start shorting, but now I am very concerned. The SP500 MACD has turned flat, but remains above zero at 11.35. I would advise caution in taking any position during this uncertain period although some technical indicators have starting to turn bearish. members' sentiments are 65 % Bearish and when it switches over to bullish, as it did on Tuesday 8-5, watch for the market bottom to fall out some are saying as the markets usually go against 'Sheeple' buying high and selling low.

Investors Intelligence sets the breath at 61.1% bullish with the status at BearConfirmed. (Chart Here ) NYSE Bullish Percent Index ($BPNYA) is at 65.70. (Chart Here) Very close to resistance now and now flatting. S&P 500 Bullish Percent Index ($BPSPX) is at 75.20. (Chart Here) Remains below support, now resistance and flatting. 10 Year Treasury Note Yield Index ($TNX) is at 25.00. (Chart Here) Treasury Yield Curve Approaches Flattest Since 2009. Overbought / Oversold Index ($NYMO) is at -8.71. (Chart Here) (Need to type in $NYMO) It is now around the area where it turns and starts to descend, but any thing below -30 / -40 is a concern. Oversold conditions on the NYSE McClellan Oscillator usually bounce back at anything over -50 and reverse after reaching +40 oversold. Wednesday, 8-20-2014, $NYMO climbed to 58.24 is signaling a market reversal and apparently it has started. Consumer Discretionary ETF (XLY) is at 68.28. (Chart Here)

Chris Ciovacco says, "As long as the consumer discretionary ETF (NYSEARCA:XLY) holds above 67.06, all things being equal, it is a good sign for stocks and the U.S. economy." (Actually the support looks to be in the 66.88 range) This chart clearly shows that dropping below 65.50 should be of a great concern to bullish investors. Wednesday, 9-3-2014, XLY edged up to 69.25 and that is another notch in the gun signaling that we might have another reversal very soon – at least to cover the gap below at 67.85. Unusually large drop today, protect thyself!

The DOW at 4:00 is at 17014 down 98 or -0.57%.

The SP500 is at 1988 down 13 or -0.65%.

SPY is at 199.38 down 1.27 or -0.65%.

The $RUT is at 1159 down 14 or -1.18%.

NASDAQ is at 4552 down 40 or -0.87%.

NASDAQ 100 is at 4062 down 34 or -0.82%.

$VIX 'Fear Index' is at 13.60 up 0.94 or 7.42%. Bearish Movement

(Follow Real Time Market Averages at end of this article)

The longer trend is up, the past months trend is net positive, the past 5 sessions have been neutral and the current bias is negative.

How Oil Really Gets Priced

WTI oil is trading between 93.94 (resistance) and 92.53 (support) today. The session bias is negative and is currently trading down at 92.69. (Chart Here) There is a very large gap at 97.06 and these types of gaps are usually filled sooner rather than later. It would not surprise me to see the oils move back up in the very near future. (Chart Here) (Look at the 5H time scale.)

Brent Crude is trading between 100.62 (resistance) and 99.06 (support) today. The session bias is negative and is currently trading down at 99.22. (Chart Here)

Why Gold Will Rise When The Dollar Falls

- and -

The general consensus is that gold prices will actually fall in the next twelve months (Sept to Aug. 2015). Goldman Sachs estimates that gold will fall to $1,050 an ounce, a drop of nearly 19%.

Gold is volatile and trading from 1258.93 and 1248.77 and is currently trading down at 1256.60. The current intra-session trend is positive. (Chart Here)

Dr. Copper is at 3.107 falling from 3.187 earlier. (Chart Here)

The US dollar is trading between 84.65 and 84.18 and is currently trading up at 84.27, the bias is currently negative(Chart Here) >>>> There is a gap below between 83.92 and 83.79, watch out below as this rise is expected to be temporary.<<<<<<

The markets are still susceptible to climbing on 'Bernankellen' vapor, use caution!

"Investors should remember that excitement and expenses are their enemies. And if they insist on trying to time their participation inequities, they should try to be fearful when others are greedy and greedy only when others are fearful." - Warren Buffett

If you would like to get advanced buy/sell tweets, sign-up in the column to the right of this post by clicking on the 'Follow' button. Write me with suggestions and I promise not to bite.

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Written by Gary





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