Written by Gary
Closing Market Commentary For 08-27-2013
Market has been melting down all session, but important to note that several of the gaps formed sometime ago on the SP500 (and others) have been closed - that's bullish for those that follow gaps. Now looking ahead there are gaps above the current level that need to be covered - when is the question.
By 4 pm the averages had closed down 1% (large caps) to 2 % (small caps) which will probably have a positive reaction tomorrow - unless John Kerry starts dropping cruise missiles all over Syria. I wouldn't get all excited about it, just wait to watch the highlights when it comes out on DVD.
We have reached that 5% decline I have written and now we watch to see if there is going to be any more correction. Serious gaps left by the SP500 some time ag owere covered today and now we concentrate on the ones above. Yesterday I said the correction was over unless Syria came into the picture, which it did, and that would be a black swan of sorts, which it has.
Interesting this 2 day decline happened when it did as the markets were poised to climb higher before any sort of notable 'correction' was scheduled to come into the financial picture. Yes, the bears have been preaching for years that this house of cards is about to tumble (true), but we all know it wasn't going to happen for a while - maybe next year.
So here we are at another market crossroad and everyone is guessing what is going to happen next. I wrote last year that any daily decline would never exceed 2.5% because of the physical ownership of the markets, so far this has held true. The funds and other large entities have no reason to jump ship while the sheeples, prone to be skittish will be the ones to sell. What we may see here is the sheeples wanting to jump back in before the week is over and drive the markets right back up.
I doubt that there will be much to do, market wise, after Obama slings a few cruise missiles around because the current administration is being laughed at from around the World and doesn't believe he has the stomach to do anything serious except talk serious about the deplorable conditions there (true).
What this means is that tomorrow, and the day after that, will business as usual with maybe a bit of emphasis on oil prices. More than likely we will see the markets start melting back up, but then that is just a guess and you know how much I hate guessing.
The DOW at 4:00 is at 14776 down 170 or -1.14%.
The SP500 is at 1630 down 26 or -1.59%.
SPY is at 163.30 down 2.70 or -1.62%.
The $RUT is at 1013 down 25 or -2.41%.
NASDAQ is at 3578 down 79 or -2.16%.
NASDAQ 100 is at 3059 down 63 or -2.02%.
The longer trend is up, the past months trend is bullish, the past 5 sessions have been down and the current bias is bearish.
WTI oil is trading between 105.91 and 109.29 today. The session bias is neutral and is currently trading up at 108.83.
Brent Crude is trading between 110.76 and 114.42 today. The session bias is positive and is currently trading siedways at 114.19.
Gold rose from 1395.29 earlier to 1423.28 and is currently trading down at 1416.20.
Dr. Copper is at 3.333 falling from 3.378 earlier.
The US dollar is trading between 81.17 and 81.15 and is currently trading up at 81.17, the bias is currently negative.
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Written by Gary