April 16th, 2013
in Gary's blogging
Closing Market Commentary For 04-16-2013
Markets closed up significantly and most importantly the SP500 closed above the 1571 / 73 area indicating that we will have anther try for the recent highs. I suspected yesterday's decline was going to become a bear trap because of several fundamentals that need to be addressed. One of which are several gaps that remain open in several of the major averages.
It appears that one can trade relatively safely for the time being as there is going to be another test of the highs.
Remember, this casino market could reverse itself on a moments notice. Do not get caught with a high percentage of funds locked up in falling dogs.
Something to read.
Below is a very interesting chart that explains a lot.
One thing that [we] want to point out on today's chart below, are the two blue trend lines from December to April that we drew on the NYA Index and the Institutional Accumulation/Distribution part of the chart.
If you notice, the NYA trend line has been moving up, while the Institutional Accumulation/Distribution trend line has been going since December.
What does this mean? It means that most of the money flowing into the market has not been coming from Institutional Investors. In fact, Institutional Investors have been Accumulating less and less as the market has been moving higher and higher.
This also suggests that Institutional Investors have been profit taking as time moves on, and at some point they will over-burden the market with their selling.
VIX, the market's measure of forward-looking expectations of equity volatility has been hovering at decade lows (and even after yesterday's spike has plunged back once again today). MOVE, the bond market's measure of forward-looking uncertainty is at all-time record lows.
As one infamous rates trader said recently, maybe it's early Alzheimers, but we are fairly certain that that last time Implied Volatility was scraping the lows, we did not experience:
Gold moving almost $250 or over 15% in less than 48 hours;
A G-3 currency moving over 25% in less than six months;
A G-3 bond yield moving by 35% in two months;
The Dow leaping by almost 20% in five months;
A joint monetary policy as impactful as Volker or the Paris accords.
We can't help but agree.
The DOW at 4:00 is at 14756 up 157 or 1.08%.
The SP500 is at 1574 up 22 or 1.43%. (Testing the 1571 – 1573 area – must go above and stay for the market to go higher, which it did. Stay tuned.)
SPY is at 157.24 up 2.11 or 1.36%.
The $RUT is at 923.30 up 16 or 1.78%.
NASDAQ is at 3264 up 48 or 1.50%.
NASDAQ 100 is at 2838 up 41 or 1.46%. (A lot of analysts are currently watching the 100.)
The longer trend is up, the past months trend is bullish, the past 5 sessions have been bullish to neutral and the current bias is up.
WTI oil is trading between 86.05 and 88.90 today. The session bias is bullish and is currently trading up at 88.78.
Brent crude is trading between 98.00 and 100.35 today. The session bias is bullish to neutral and is currently trading up at 99.96.
Gold fell from 1496.25 earlier to 1327.10 and is currently trading down at 1366.60.
Dr. Copper is at 3.30 up from 3.20 earlier.
The US dollar is trading between 82.61 and 81.78 and is currently trading up at 81.86, the bias is currently negative.
The 500 at the close.
The DOW at the close.
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Written by Gary