Written by Gary
Closing Market Commentary For 11-13-2013
The large caps all made new historical highs while the small caps reached previous highs and the $RUT trialled behind. Some of us in the office are skeptical of the new highs being the front runner of even higher highs, but as I have written before, it is possible.
By the closing bell the averages were still pushing upwards, er, melting, on hard to believe low to moderate volume. No news to validate the current rise and I expect the averages to collapse if the job numbers tomorrow to be good.
While I knew it was possible for the averages to go higher, I didn't really believe it would do so on such low volume. I think the Wall Street Crooks, DaBoyz and the HFT algo computers had the most influence on this 'false' rise. This 'break out' needs to be validated with some more volume for me to be convinced we are indeed moving higher.
Treasuries rallied 4-6bps on the day (with the POMO-driven belly outperforming). The USD dumped back its knee-jerk gains on Europeans trying [desperately] to talk down the EUR early on.
High yield credit banged higher into the close. VIX was man-handled back under 12.5% (despite being bid early). Oh - and every US equity market malted up in an insane interday swing which seems to be pinned on the back of expectations Yellen will open her shirt tomorrow showing a big red "S" on it.
So while every flow-driven market banged higher in a mad scramble of un-tapery goodness, gold went sideways and silver was monkey-hammered (-4.5% on the week). Nasdaq's swing from low to high is the largest positive intraday move for the index in 5 months!
The short term indicators are still leaning slightly towards the sell side at the closing mark, but I would HIGHLY advise caution in taking any position because of the Fed's reluctance to give any hints of when the taper will begin. I would also take chart and other technical indicators with a grain of salt for the time being and watch what the Fed does.
Today's breakout may be a HFT computer move and mean absolutely nothing. The problems we had last week are still here and haven't gone away. Don't get all gaga and become a 'sheeple' as it could ruin your portfolio or bank account.
The longer 6 month outlook remains 40-60 sell until we can see what the Fed is going to do, simple as that. If we get Fed tapering in December the markets will certainly react in a negative fashion. If the tapering begins in March 2014, like many believe it will, the markets are going to price that in by declining sooner. I am expecting weak to negative markets for the foreseeable future. Also, many pundits have stated that we may have seen the top - but I wouldn't count it as long as the Fed continues to hand out 'Market Viagra'! I would like to see a blowout candle to verify a top along with heavy volume.
Also, institutional selling has been in an up-trend further developing this market into a high risk place to be.
The DOW at 4:00 is at 15822 up 71 or 0.45%.
The SP500 is at 1782 up 14.31 or 0.81%.
SPY is at 178.36 up 1.42 or 0.80%.
The $RUT is at 1112 up 10.71 or 0.97%.
NASDAQ is at 3966 up 46 or 1.16%.
NASDAQ 100 is at 3406 up 17 or 1.20%.
The longer trend is up, the past months trend is bullish, the past 10 sessions have been sideways and the current bias is positive.
WTI oil is trading between 93.09 and 94.52 today. The session bias is negative and is currently trading down at 93.75.
Brent Crude is trading between 105.74 and 107.16 today. The session bias is positive and is currently trading down at 106.82.
Gold rose from 1269.16 earlier to 1278.77 and then fell late in the session to 1267.68 and is currently trading up at 1274.70.
Dr. Copper is at 3.160 falling from 3.222 earlier.
The US dollar is trading between 80.85 and 81.33 and is currently trading down at 80.86, the bias is currently negative.
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Written by Gary