Midday Market Commentary For 07-24-2013
Markets slipped off the opening highs having failed to best yesterday's run-up of the major averages. Volume has been in the low to moderate range as investors mull over events that may put a damper on hope of additional highs.
By noon the averages were trading quietly in a narrow zone on low volume. The DOW has recovered somewhat, but most of the averages remain mixed and directionless.
The news of late is exactly inspiring, but isn't sending the markets spiraling downward as some pundits are expecting. The small caps are up and usually that is bullish, but today I am not so sure.
The Commerce Department reports sales of new, single-family homes rose 8.3% in June to an annual rate of 497,000 units, beating expectations of 482,000. It was the highest reading in five years.
Maybe this explains the rise in sales of SFH.
"In the last week of June, the dollar value represented by ARM applications accounted for 16 percent of mortgage requests, the highest share since July 2008, two months before Lehman Brothers Holdings Inc. collapsed, according to Mortgage Bankers Association in Washington." Oops.
This is an important observation that investors and traders alike should pay attention too.
How a Reduction of Institutional Selling impacts the stock market:
Last week we posted an update showing how Institutional Investors where in a definite down trend of selling activity. The problem with this nice looking scenario, was that Institutional Investors were "NOT doing any new Buying".
That said two things:
1. That they were NOT adding to their previous basket of holdings, and therefore their "real Accumulation" levels had stopped expanding.
2. That by continuing to decrease their daily amount of selling, they were "allowing" the market to rise on the Inflowing Liquidity injected by others.
This lack of buying participation suggests that, when they do finally decide to sell or go into a profit taking modality, that they will have to do it quickly. If that is the scenario that unfolds in the coming days, then the market will have a sharp and/or quick retreat.
The DOW at 12:00 is at 15546 down 21 or -0.14%.
The SP500 is at 1689 down 3 or -0.17%.
SPY is at 168.90 down 0.23 or -0.14%.
The $RUT is at 1048 down 3.72 or -0.35%.
NASDAQ is at 3593 up 14 or 0.39%.
NASDAQ 100 is at 3051 up 20 or 0.66%.
The longer trend is up, the past months trend is bullish, the past 5 sessions have been bullish and the current bias is neutral.
WTI oil is trading between 107.49 and 106.24 today. The session bias is bearish and is currently trading up at 106.30.
Brent crude is trading between 108.60 and 107.25 today. The session bias is bearish and is currently trading up at 107.41.
Gold fell from 1347.90 earlier to 1330.40 and is currently trading down at 1332.45.
Dr. Copper is at 3.205 rising from 3.165 earlier.
The US dollar is trading between 82.34 and 82.01 and is currently trading down at 82.18, the bias is currently neutral.
To contact me with questions, comments or constructive criticism is always encouraged and appreciated:
Written by Gary