Written by Gary
Closing Market Commentary For 11-15-2013
Here we go again, retracting what I said was not likely to happen. At least 4 years ago there were pundits that predicted the SP500 would go to 1800, the DOW to 16000 and the NASDAQ to 4000 (NASDAQ historical high 5132 on 3-1-2000) and I lambasted the concept as inconceivable. The QE programs and a bunch of inept Keynesian scholars have proved me wrong with flooding the 'system' with 'funny money'. Eventually though I will get the last laugh but at a great expense to many that have been suckered into this Ponzi scheme. But for now, the euphoria based on false hopes and expectations rules the day - party on and worry about the hangover some other day.
I had the feeling when QE was first introduced it wasn't the right thing to do and became sure of it when QE2 was initiated and I knew the developing financial quandary was not sustainable and yet this foolishness continued. Today, I see serious financial pitfalls awaiting the markets as more and more Fed money is poured into the 'system' unabated and looking to becoming a sobering train wreck for many. Ah, the sheer power of greed.
By 4 pm the BTFDers made a last minute push to take the averages above the lofty goals mentioned above, but fell a few points below the destination of many. Will we see the 'sheeples' join in on Monday and push the averages to even higher, ridiculous and unsustainable numbers?
The short term indicators were leaning towards the buy side at the morning opening and by the closing bell they eased to a 50-50 proposition. However, I would advise caution in taking a position because of the Fed's reluctance to give any hints of when the taper will begin and Janet Yellen's hollow conformation hearing rhetoric. I would also take chart and other technical indicators with a grain of salt for the time being and watch what the Fed does.
The swings this morning were not enough to get many traders interested in gambling money in a highly precarious market and those who guessed well were repaid in kind. The recent highs have been purely speculative based solely on remarks from Janet Yellen which are viewed as Fed current policy and not necessarily her own. That is a problem for me as these dovish financiers like to say one thing and then turn around and do something else.
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, which is not likely, the markets will certainly react in a negative fashion. If the tapering begins in March 2014, with Yellen at the helm, 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 we have just seen, 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.
The DOW at 4:00 is at 15961 up 85 or 0.54%.
The SP500 is at 1798 up 7.56 or 0.42%.
SPY is at 179.91 up 0.78 or 0.44%.
The $RUT is at 1116 up 4.76 or 0.43%.
NASDAQ is at 3986 up 13 or 0.33%.
NASDAQ 100 is at 3423 up 7 or 0.22%.
The longer trend is up, the past 12 months trend is bullish, the past 5 sessions have been positive and the current bias is positive.
WTI oil is trading between 93.60 and 94.51 today. The session bias is negative and is currently trading down at 93.67.
Brent Crude is trading between 108.66 and 107.68 today. The session bias is sideways and is currently trading sideways at 108.33.
Gold rose from 1279.66 earlier to 1289.59 and is currently trading up at 1287.90.
Dr. Copper is at 3.171 rising from 3.143 earlier.
The US dollar is trading between 81.21 and 80.83 and is currently trading down at 80.88, the bias is currently neutral to negative.
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Written by Gary