Written by Gary
Midday Market Commentary For 11-22-2013
The averages continued to melt up from the morning lows where the SP500 and the DOW 'touched' their previous historic highs twice and have backed off for now. Volume is anemic and it appears that only the HFT computers are active.
By 12:15 the large caps were coasting just below their historic highs and anemic volume. I do not believe the HFT computers can push the averages any higher today.
ADVFN reported, "The rally in question has been built on the back of the Fed's promise of a stimulatory environment. If any catalyst points to the Fed giving up its accommodative stance, there is a danger of a pullback and near term support for the index lies around the 15,965, 15,890 and 15,804 levels."
Personally, I think it could go a lot lower.
The problem facing traders is that the trading range, which has been so narrow during the trading day lately, that way too much money has to be put on the table just to get back meager gains.
The short term indicators are still leaning towards the sell side at the midday, but I would advise caution in taking a position because of the Fed's cryptic utterances in hinting when the taper will begin and by how much. I would also take chart and other technical indicators with a grain of salt for the time being and watch what the Fed does WHEN it actually does something.
The longer 6 month outlook remains 40-60 sell until we can see what the Fed is actually going to do, simple as that. If we get some Fed tapering in December the markets will certainly react in a negative fashion, how much of course depends on much. 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.
Members of the FOMC believe the US economy has shown signs of improvement, but they have assured short-term interest rates would remain low for quite some time to come. Alpari Market Analyst, Craig Erlam, said: "Many members of the Fed now appear eager to start winding down its asset purchases and are looking for ways to do it that will create the least disruption in the financial markets, such as setting simple thresholds for reductions, or even more simply, providing a timetable for tapering that is not data dependent."
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 (shooting star) to verify a top along with heavy volume.
The DOW at 12:30 is at 16028 up 19 or 0.12%.
The SP500 is at 1801 up 5 or 0.31%.
SPY is at 180.48 up 0.57 or 0.32%.
The $RUT is at 1123 up 3 or 0.31%.
NASDAQ is at 3988 up 19 or 0.47%.
NASDAQ 100 is at 3420 up 17 or 0.50%.
The longer trend is up, the past months trend is bullish, the past 5 sessions have been mixed and sideways and the current bias is sideways.
WTI oil is trading between 95.55 and 94.07 today. The session bias is positive and is currently trading up at 95.06.
Brent Crude is trading between 111.30 and 109.72 today. The session bias is positive and is currently trading up at 110.83.
Gold rose from 1240.51 earlier to 1248.22 and is currently trading down at 1242.60.
Dr. Copper is at 3.215 rising from 3.180 earlier.
The US dollar is trading between 81.13 and 80.72 and is currently trading down at 80.76, the bias is currently negative.
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Written by Gary