Closing Market Commentary For 12-09-2013
After Fisher made tapering remarks the averages started what was to become the erasing of today's earlier gains. I suggested earlier that the recent highs from this morning might not hold was because of the weak market structure that held the averages up and all it took was a 'little' commentary from a Fed official.
By 4 pm the BTFDers had jumped in and kept the averages moving completely into the red, but the trend is definitely moving south and expect it to continue tomorrow. The SP500 Chart below says it all.
SP500 daily chart at today's close
Does any one really think new Fed chair Yellen will even listen to reason?
We warned here (and here most recently), the most insidious way in which the Fed's ZIRP policy is now bleeding not only the middle class dry, but is forcing companies to reallocate cash in ways that benefit corporate shareholders at the present, at the expense of investing prudently for growth 2 or 3 years down the road.
It seems the message is being heard loud and very clear among 'some' of the FOMC members; most notably Richard Fisher:"Without fiscal policy that incentivizes rather than discourages U.S. capex (capital expenditure), this accommodative monetary policy aimed at reducing unemployment (especially structural unemployment) or improving the quality of jobs is rendered flaccid and less than optimally effective...I would feel more comfortable were we to remove ourselves as soon as possible from interfering with the normal price-setting functioning of financial markets."
The short term indicators are leaning 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. According to Fisher, the costs of the current QE program "far exceeds its purported benefits" and he is voting in 2014.
The longer 6 month outlook remains 40-60 sell until we can see what the Fed is actually going to do, simple as that.
The DOW at 4:00 is at 16025 up 5 or 0.03%.
The SP500 is at 1808 up 3 or 0.18%.
SPY is at 181.40 up 0.43 or 0.24%.
The $RUT is at 1129 down 2 or -0.17%.
NASDAQ is at 4069 up 6 or 0.15%.
NASDAQ 100 is at 3516 up 12 or 0.34%.
The longer trend is up, the past months trend is bullish, the past 5 sessions have been positive and the current bias is negative.
WTI oil is trading between 97.96 and 97.23 today. The session bias is negative and is currently trading down at 97.23.
Brent Crude is trading between 111.75 and 109.09 today. The session bias is negative and is currently trading down at 109.10.
Gold rose from 1226.69 earlier to 1242.65 and is currently trading up at 1240.30.
Dr. Copper is at 3.256 rising from 3.231 earlier.
The US dollar is trading between 80.32 and 80.12 and is currently trading up at 80.16, the bias is currently negative.
To contact me with questions, comments or constructive criticism is always encouraged and appreciated:
<p><strong><span style="font-family: arial,helvetica,sans-serif;"><span style="font-size: medium;">Written by <a rel=""author"" href="/files/gary.htm">Gary</a></span></span></strong></p>