Written by Gary
Opening Market Commentary For 12-24-2013
Premarkets were about even with yesterday's close and remained that way in light of pretty good financial reporting this morning.
The markets opened up +0.10% and the faltered to flat status only to return to +0.15% where there was a brief, but heavy spike of selling lasting a minute or so. New highs were set by the SP500 and the DOW.
By 10 am the averages were experiencing weakness most likely pre-holiday jitters among some investors.
The short term indicators are leaning towards the hold side at the opening, 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, or let profits ride a bit longer?
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 10:15 is at 16324 up 30 or 0.18%.
The SP500 is at 1830 up 2 or 0.12%.
SPY is at 182.68 up 0.15 or 0.08%.
The $RUT is at 1160 up 3 or 0.22%.
NASDAQ is at 4148 down 1 or -0.03%.
NASDAQ 100 is at 3568 down 1 or -0.03%.
The longer trend is up, the past months trend is bullish, the past 5 sessions have been positive and the current bias is sideways.
WTI oil is trading between 98.65 and 99.27 today. The session bias is sideways and is currently trading down at 99.16.
Brent Crude is trading between 111.43 and 112.05 today. The session bias is positive and is currently trading down at 111.94.
Gold rose from 1195.68 earlier to 1202.17 and is currently trading up at 1201.30.
Dr. Copper is at 3.327 rising from 3.311 earlier.
The US dollar is trading between 80.62 and 80.77 and is currently trading down at 80.75, the bias is currently positive.
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Written by Gary