Written by Gary
Midday Market Commentary For 11-25-2013
Not a safe day for trading, but an interesting one technically. The DOW after falling off its morning high rose again to make another new high while other markets barely had enough steam to melt up off their morning lows. All of this action on falling volume of course.
By noon the averages had appeared to peaked and were showing weakness after trading sideways for the past hour. Even the DOW was starting to melt downward.
Might be a good day to leave the office early as the likelihood of something important happening is remote.
The short term indicators are leaning heavily towards the sell side at the midday, but I would advise caution in taking a long 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.
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."
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.
Also, many pundits have stated that we may be seeing 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 12:15 is at 16092 up 22 or 0.18%.
The SP500 is at 1806 up 1 or 0.06%.
SPY is at 180.93 up 0.12 or 0.07%.
The $RUT is at 1126 up 1 or 0.09%.
NASDAQ is at 3997 up 5 or 0.12%.
NASDAQ 100 is at 3428 up 6 or 0.18%.
The longer trend is up, the past months trend is bullish, the past 5 sessions have been positive and the current bias is mixed with a negative slant.
WTI oil is trading between 94.90 and 93.24 today. The session bias is negative and is currently trading down at 93.84.
Brent Crude is trading between 111.19 and 108.07 today. The session bias is positive and is currently trading down at 110.42.
Gold fell from 1244.34 earlier to 1227.50 then turned around and is currently trading down again at 1239.05.
Dr. Copper is at 3.228 falling from 3.270 earlier.
The US dollar is trading between 80.67 and 81.05 and is currently trading down at 81.02, the bias is currently positive.
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Written by Gary