Written by Gary
Closing Market Commentary For 12-12-2013
The averages moved lower this morning on low to moderate volume. As the volume became anemic the averages started melting upwards thanks to manipulations of the HFT computers. When investors smelled that it was time to take some profits off the table, the volume picked up and the averages started to melt downwards.
By 4 pm the averages had melted down withing points of the morning lows again with the large caps leading the way. Remember the bear is always there to grab your profits.
If previous markets have any lesson for us, then expect to see the markets show green tomorrow. I do not like overnight trades, but a long trade today would probable be a good bet for tomorrow- notice I said 'bet'. After all this a casino isn't it?
The short term indicators are still leaning heavily towards the sell side at the closing, 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 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 4:00 is at 15739 down 104 or -0.66%.
The SP500 is at 1775 down 7 or -0.38%.
SPY is at 178.10 down 0.58 or -0.38%.
The $RUT is at 1103 up 2 or 0.16%.
NASDAQ is at 3998 down 5 or -0.14%.
NASDAQ 100 is at 3460 down 9 or -0.25%.
The longer trend is up, the past months trend is bullish, the past 5 sessions have been mixed and the current bias is negative.
WTI oil is trading between 97.31 and 98.15 today. The session bias is negative and is currently trading down at 97.36.
Brent Crude is trading between 109.96 and 108.44 today. The session bias is negative and is currently trading down at 108.55.
Gold fell (crashed) from 1256.54 earlier to 1223.63 and is currently trading down at 1226.50.
Dr. Copper is at 3.292 falling from 3.309 earlier.
The US dollar is trading between 79.85 and 80.24 and is currently trading down at 80.17, the bias is currently positive.
To contact me with questions, comments or constructive criticism is always encouraged and appreciated:
Written by Gary