Written by Gary
Closing Market Commentary For 12-06-2013
At 3:37 I had every expectations of the bottom dropping out when the averages suddenly started a free-fall, but alas, the BTFDers jumped in and save the week pushing the number back up to where they were.
By 4 pm the DOW almost hit +200 and the SP500 was up 20 points as the small caps were still down trending remaining in the green.
SEC Officially Above The Law: Prosecutors Decline To Charge SEC Employee For Violating Internal Rules
Two weeks ago we wrote of SEC compliance examiner (yes, compliance examiner) Steven Glichrist who was arrested for being non-compliant with the SEC's ethics requirement to disclose his financial holdings.
"New York-based SEC employee Steven Gilchrist was charged with three counts of making false statements regarding the nature of his personal financial holdings.
As WSJ reports, the 48-year-old compliance examiner at the agency, allegedly certified that his stock holdings were in compliance with the agency's ethics rules, when in reality he had held shares of six companies that agency staffers are barred from holding.
The SEC is "very disappointed that an employee allegedly made false statements to conceal prohibited holdings after being told by our ethics office to divest."
Fast forward to today when we learn that not only was the SEC not disappointed when another SEC employee was found to have flouted virtually the same rules, but that, inexplicably, federal prosecutors decided not to prosecute.
For the traders, short term indicators are leaning towards the hold side at today's close, but I would advise caution in taking any 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 (17th. -18th. meeting) 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.
The DOW at 4:00 is at 16020 up 199 or 1.26%.
The SP500 is at 1805 up 20 or 1.12%.
SPY is at 181.01 up 2.00 or 1.12%.
The $RUT is at 1131 up 9 or 0.79%.
NASDAQ is at 4062 up 29 or 0.73%.
NASDAQ 100 is at 3504 up 26 or 0.76%.
The longer trend is up, the past months trend is bullish, the past 5 sessions have been negative and the current bias is up but trading sideways.
WTI oil is trading between 97.15 and 97.75 today (excluding the big swings prior to the opening). The session bias is positive and is currently trading up at 97.69.
Brent Crude is trading between 110.95 and 111.68 today (excluding the big swings prior to the opening). The session bias is neutral and is currently trading down at 111.58.
Gold fell from 1233.46 earlier to 1222.97 and is currently trading down at 1227.80. (excluding the big swings prior to the opening)
Dr. Copper is at 3.240 rising from 3.217 earlier.
The US dollar is trading between 80.40 and 80.24 (excluding the big swings prior to the opening) and is currently trading up at 80.28, the bias is currently negative.
To contact me with questions, comments or constructive criticism is always encouraged and appreciated:
Written by Gary