Market Commentary: New Highs Made On Low Volume, Not Comforting

November 22nd, 2013
in Gary's blogging, market close

Written by

Closing Market Commentary For 11-22-2013

At 1:07 the large caps made an attempt to cross over the resistance and again 1:14 but on the third attempt the averages started to slide downward. The really interesting part is that the climb was done on unmeasurable volume, but the decline wasn't. Then at 2:30 on suspect green moderate volume (read HFT) the DOW and SP500 pierced the resistance.

By 4 pm the markets closed higher but on moderate red volume as some of the bears were opting out. Not exactly a bullish close.

Follow up:

It will be interesting to see whether or not this positive market run can sustain the bearish pressure. It has done it before and it could do it again, but count me out as a player - for a while anyway.

The short term indicators are leaning heavily towards the sell side at the close, 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 bond buying takes place. 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. (You couldn't tell by today's action though)

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 4:00 is at 16065 up 55 or 0.34%.

The SP500 is at 1805 up 9 or 0.50%.

SPY is at 180.65 up 0.90 or 0.50%.

The $RUT is at 1125 up 5 or 0.47%.

NASDAQ is at 3992 up 23 or 0.57%.

NASDAQ 100 is at 3422 up 19 or 0.57%.

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 positive.

How Oil Really Gets Priced

WTI oil is trading between 95.55 and 94.07 today. The session bias is negative and is currently trading up at 94.80.

Brent Crude is trading between 111.30 and 109.72 today. The session bias is negative and is currently trading up at 110.86.

Gold rose from 1240.51 earlier to 1248.22 and is currently trading down at 1241.80.

Here's why copper has lost its indicator role

Dr. Copper is at 3.220 rising from 3.180 earlier.

The US dollar is trading between 81.13 and 80.72 and is currently trading down at 80.73, the bias is currently negative.

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.

To contact me with questions, comments or constructive criticism is always encouraged and appreciated:


Written by Gary


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