Written by Gary
Closing Market Commentary For 12-23-2013
About 1:30 the averages started to decline only to have the BTFDers and the HFT computers melt the averages melt back up confusing the bears.
Markets closed up, but there was obvious downward pressure that may come to be real pain in the butts of any one still trading long. Tomorrow is slated to be another day of prolonged agony and watch out for the bear in bulls clothes.
The short term indicators are still leaning towards the hold side at the close, but I would advise caution in taking any position during this volatile transition period. Here is the quandary some investors have now. They have bet on the QE program to bolster their profits and knowing full well they may see some eroding over the next few months, so what should they do? Start reducing positions now, most probable action, or let profits ride a bit longer? My non-technical 'gut feeling' says the little guy, that's us, had better take some additional caution through the remaining days of the year and try not to get caught in a faux bull or bear trap.
I would also take chart and other technical indicators with a grain of salt for the time being and watch what the Fed does over the next 4 months. Removing 10 billion from the bond buying program each month isn't going to do much in reducing the QE program in the beginning, but halving it in 4 months certainly will - IF - the Fed's continues the taper program. My instincts tell me that the Keynesian's are going to be reluctant to stop their grand financial experiment and will want to taper the taper within the next several months - especially if the employment rate increases.
The longer 6 month outlook still remains 40-60 sell until we can see what the effects are in this almost nothing start of the Fed's 'Taper'. By March investors should know how the taper is going to work out in relationship to the stability of the US financial markets and their ability to not to slide downward.
For now, I am continuing to expect weak to negative markets for the foreseeable future. My advise is to invest in tennis balls as they have a higher rate of return!
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', even if it has been reduced somewhat! 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 16295 up 73 or 0.45%.
The SP500 is at 1828 up 10 or 0.53%.
SPY is at 182.45 up 0.97 or 0.53%.
The $RUT is at 1157 up 11 or 0.94%.
NASDAQ is at 4149 up 44 or 1.08%.
NASDAQ 100 is at 3569 up 38 or 1.08%.
The longer trend is up, the past months trend is bullish, the past 5 sessions have been positive and the current bias is positive.
WTI oil is trading between 98.65 and 99.28 today. The session bias is negative and is currently trading down at 98.69.
Brent Crude is trading between 111.27 and 111.87 today. The session bias is negative and is currently trading down at 111.50.
Gold rose from 1192.18 earlier to 1203.42 and is currently trading down at 1197.50.
Dr. Copper is at 3.308 falling from 3.312 earlier.
The US dollar is trading between 80.70 and 80.46 and is currently trading down at 80.57, the bias is currently sideways with a slight positive slant.
To contact me with questions, comments or constructive criticism is always encouraged and appreciated:
Written by Gary