Written by Gary
Midday Market Commentary For 12-10-2013
Sorry for the late post - Comcast has struck again leaving me in the dark.
What goes up, as they say, must come down. Call this session the 'The Great Sea-Saw' as we went from negative to positive (almost) and by noon we are scraping the bottom of the barrel once again. Nice swings today for profit taking if you are the crook(s) that is orchestrating them.
As I have said, forget the fundamentals in this casino market.
Since fundamentals have been irrelevant for years, the only possible (short-term) guide in a market in which the only thing that does matter is the Fed's balance sheet, are trends (as Hugh Hendry put it so appropriately) here are some technical trade ideas from Bank of America, on the EURUSD, Treasurys, the S&P500 and WTI.
The short term indicators are leaning towards the hold 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 (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 some believe it will, the markets are going to price that in by declining sooner. However, 74% of Bloomberg surveyed economists believe tapering will believe either in December or January as of 12-09-2013, but Fisher says it will take place in the first quarter. 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 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 1:00 is at 15995 down 30 or -0.2218.
The SP500 is at 1804 down 3 or -0.23%.
SPY is at 180.99 down 0.41 or -0.23%.
The $RUT is at 1122 down 7 or -0.65%.
NASDAQ is at 4064 down 4 or -0.11%.
NASDAQ 100 is at 3516 down 0.01 or -0.00%.
The longer trend is up, the past months trend is bullish, the past 5 sessions have been positive to mixed and the current bias is positive.
WTI oil is trading between 97.40 and 98.73 today. The session bias is sideways and is currently trading down at 98.33.
Brent Crude is trading between 110.44 and 108.56 today. The session bias is positive and is currently trading down at 109.17.
Gold rose from 1240.20 earlier to 1266.88 and is currently trading up at 1262.50.
Dr. Copper is at 3.267 rising from 3.250 earlier.
The US dollar is trading between 80.13 and 79.83 and is currently trading down at 79.95, the bias is currently sideways.
To contact me with questions, comments or constructive criticism is always encouraged and appreciated:
Written by Gary