Live Market Commentary For: 05-16-2012

May 16th, 2012
in Gary's blogging

After Market Closing Remarks And Analysis:

Again, I was surprised today that the markets closed down further than expected, but Mr. market, as usual, has kept us guessing. I know we have a weak market and it is not unexpected to see the equities moving down. I am so used to seeing the markets recover and head back up, that so many negative days in a row keeps me waiting for the other shoe to drop and it hasn't.

About 10:30 this morning the market decided it had enough for the day and started melting to levels not seen since yesterday and as far back as February this year. For the past 2 sessions I thought we would see a flat to slight gains on the daily markets as a correction to the recent decent. As I said for the past 2 days, maybe tomorrow we will see an upward correction, see Bollinger bands of SPY below.

Follow up:

The DOW closed at 12598 down 33.45 or -0.26%, the 500 closed at 1324 down 5.86 or -0.44%, $RUT closed at 772.11 down 5.25 or -0.68%, SPY closed at 132.77 down 0.57 or -0.43% and QQQ closed at 62.90 down 0.47 or -0.74%. The trend is down, but the slow nature of the fall is worrisome in that you don't know when it will be over.

Dr. Copper is still showing signs of deflation ending up at 3.47, about a penny below yesterday. Gold ended up at 1538. WTI oil slid further down today to the high 91's closing at 92.64 and Brent stayed in the 111.71 area off 4 cents from yesterday. The USD closed at 81.58 having ranged today from 81.74 to a low of 81.36

SPY at the close. The bottom Bollenger band indicates that a possible sideways movement is possible tomorrow. But as long as the day does not actually penetrate the lower band I guess it is within parameters of NOT having a correction.

The 500 at the close.

The $RUT at the close.

The DOW at the close.

The Indexes at the close.

Oh, just great news. Something that is eventually not going to be very good for the markets.


We have a date for the second Greek election, and also a fresh poll... The radical Syriza party is making gains and is on track to take a majority in five week's time. A survey which polled Greeks from May 10 to 14 found that the anti-austerity party took 20.3pc of votes, up from the 17pc they won in the first election. New Democracy slipped to 14.2pc and PASOK dipped to 10.9pc, both below the results from the first ballot. If Syriza win and reject Greece's austerity measures then the country could have its flow of bailout cash stemmed.”


FED'S BULLARD: questionable whether slowdown in growth in China would hurt U.S. economy.

FED'S BULLARD: The real risk to the U.S. would be financial meltdown in Europe, which the ECB has mitigated.

FED'S BULLARD: European sovereign debt crisis is likely to roll on for a very long time, though it won't likely weigh on U.S.

FED'S BULLARD: "Ultra-easy monetary policy" risks inflation.


Noon Market Commentary:

Markets have generally drifted lower under moderate volume and within a tight range. The DOW is at 12653 up 20.00 or 0.16%, the 500 is at 1331 up 1.12 or 0.08% and the $RUT is at 777 down 0.25 or -0.03%.

After Market Opening Comments:

Markets opened without much fanfare and a slightly negative bias. Red volume was very high and among the highest in many sessions but then dropping off. The 'dippers' were nowhere to be seen after the opening and the markets melted slowly down. The DOW is at 12687 up 58.16 or 0.45%, the 500 is at 1338 up 7.38 or 0.57%, the $RUT is at 781 up 3.77 or 0.48%, SPY is at 134.26 up 0.94 or 0.73% and QQQ is at 63.68 up 0.31 or 0.51%.

Almost all the indexes are in the green except the DJ Technical's which are off 2.70. Gold, oil and copper are all steady with a positive bias. By 10 am the volume had turned to green but way below the first ten minute red volume. The $VIX is at 20.94 and falling. I do not see this positive run to continue past Friday as the fundamentals are weak, threatening the markets stability to continue an upward trend.

Premarket Commentary:

As speculated last night the market could be up this morning and it was slightly with a positive bias. The SP500 was up 5.60, the DOW was up 39.00 and the NASDAQ was up 5.50 before the 8:30 reporting. After the morning reports the markets pulled back a couple of points and began a narrow range of trading and not advancing above the morning highs. At 9:15 the US Industrial Output numbers were released, but the markets did little, nothing actually.


(MarketWatch) - “The output of the nation's factories, mines and utilities surged 1.1% in April, the biggest gain since December 2010, the Federal Reserve said Wednesday. The gain in April was above Wall Street expectations of a 0.7% increase.

The April report was strong across the board. Production was boosted by mining, auto production and a higher utility output.

March production was revised up to a 0.6% decrease from the initial estimate of unchanged, while February production was revised to a 0.4% gain from a flat reading.

Factory activity alone rose 0.6% in April after a 0.5% drop in the previous month, which was the first decline in four months. Capacity utilization - a gauge of slack in the economy - rose to 79.2% in April from 78.4% in March.

This is the highest capacity reading of this business cycle.”


Gold was as low as 1534 this morning and then rising to 1539. Copper was as low as 3.45 this morning and it rose to 3.48.


Gold & Silver pushed below support recently and now Copper is working on a similar breakdown. In the past Copper weakness was a message of a global slowdown and a sign that "Deflation" was taking place. (See chart here)


Housing starts rose 2.6% to a 717,000-unit rate in April, topping estimates of a 680,000-unit rate. Permits to build new homes fell 7% to a 715,000-unit rate, coming up short of the 730,000-unit rate expected.”


In January, February and March, neither the technicals nor the news mattered. The market just went up and up and up regardless of what was thrown in its path. Now the opposite is taking place. Nothing matters. The market is going down and down and down.

The most bullish thing I can say about the market right now is that it’s been downright nasty, and the bears are coming out of the [woodwork]. Lots of people are predicting much lower prices. Sentiment is at a very low level – a condition for a surprise move up.

. . . we’ll get FOMC minutes this afternoon. The last Fed meeting was three weeks ago – well before the calendar flipped to May and the selling pressure began. Hence I don’t expect there [will] be much talk about QE3 . . .”


8:00 AM On the hour: S&P +0.34%. 10-yr -0.15%. Euro -0.02% vs. dollar. Crude -1.19% to $92.86. Gold -1.17% to $1538.85


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Written by Gary

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