May 29th, 2013
in Gary's blogging
Closing Market Commentary For 05-29-2013
Markets basically floundered throughout the session today on low volume nixing all hope for the bulls who hunger for refuge in the upper atmosphere of new highs. Then again, the bears who were hopeful of the bottom falling out this morning were likewise disappointed when the averages traded in a narrow range most of the session.
The markets closed down with the $RUT leading the pack at -1.xx%. We will probably see more down days, but the indicators still point higher, not much, but as long as the Fed's money machine is still printing there will be pressure to move the averages upward.
The article below is basically what I have been saying for a year. The markets are in danger of collapsing and have been for 2 years. The longer this house of cards remains intact and grows, the harder it will fall.
Between the actions of the world's central banks and the use of leverage we have built the biggest casino ever built in the history of the world.
It is no longer possible to invest. A casino does not have an investment window or an investment game and there is nothing around us but a giant building holding Games of Chance now. You have money and there is now nothing than can be done except to gamble and that is exactly what we are all doing.
It will take just one or two rolls on Red when money is lost, more credit demanded and then denied by the House, to cause a seizure in this giant casino. In the end it is almost always leverage that touches off the rush to the exit door and the financial markets are now levered past what we have ever known before.
The DOW at 4:00 is at 15302 down 106 or -0.69%.
The SP500 is at 1648 down 12 or -0.70%.
SPY is at 165.21 down 1.10 or -0.66%.
The $RUT is at 986.96 down 10.39 or -1.04%.
NASDAQ is at 3467 down 21 or -0.61%.
NASDAQ 100 is at 2995 down 17 or -0.57%.
The longer trend is up, the past months trend is bullish, the past 5 sessions have been mixed and the current bias is neutral.
WTI oil is trading between 93.11 and 95.22 today. The session bias was bullish in the morning and has turned negative. Currently it is trading down at 93.27.
Brent crude is trading between 104.37 and 102.63 today. The session bias is negative and is currently trading down at 102.72.
Gold fell from 1394.30 earlier to 1380.49 and is currently trading up at 1391.15.
Dr. Copper is at 3.303 falling from 3.318 earlier.
The US dollar is trading between 84.43 and 83.53 and is currently trading sideways at 83.71, the bias is currently bearish.
Interesting read from Doug Short.
The above chart reflects that 100% of the time, when lumber hit the top of its trading channel, it has fallen at least 50% in value, over and over for the past 20 years. I doubt that many of you trade lumber and many of you might be saying "Why should I care about Lumber? I don't own it!"
Let's look at lumber a little closer. The bottom of the channel was hit in 1995, 2001 and 2009, not bad times to be looking to buy stocks at low prices. The last serious decline by lumber took place in early 2011. What did the S&P 500 do after this lumber decline? SPY declined 17%, peaking in May of 2011.
Lumber is not the "Holy Grail" of stock market indicators, yet often times it has paid to respect it at the top and bottom of this 20-year channel and its message for the stock market.
The 500 at the close. (Notice the gap at the green line, expect the markets to rise up and close the gap sometime in the near future.)
The DOW at the close. (Same green line.)
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Written by Gary