Written by Gary
Opening Market Commentary For 12-26-2013
Premarkets were up this morning with the Blue Chips up +0.25% and the small caps up +0.30%.
The markets opened up at the premarket levels and remained there for the first hour trading in a narrow zone on elevated volume in the moderate area. The Sp500 and the DOW both made new historical highs. The NASDAQ matched highs in the year 2000 and the party goes on as newer highs are slated to continue well into the morning trading session.
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?
This morning one well know pundit put the sell at 100% and I have been on this bandwagon for the last week, but you still have remember the 'Fed Effect'.
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 in 4 months it 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! Look at the last 3 sessions! I would like to see a blowout candle (shooting star) to verify a top along with heavy volume.
The DOW at 10:30 is at 16422 up 64 or 0.39%.
The SP500 is at 1839 up 5 or 0.29%.
SPY is at 183.52 up 0.61 or 0.33%.
The $RUT is at 1168 up 6 or 0.51%.
NASDAQ is at 4169 up 13 or 0.33%.
NASDAQ 100 is at 3581 up 8 or 0.24%.
The longer trend is up, the past months trend is bullish, the past 5 sessions have been bullish and the current bias is positive.
WTI oil is trading between 99.06 and 99.51 today. The session bias is positive and is currently trading down at 99.37.
Brent Crude is trading between 111.47 and 112.01 today. The session bias is positive and is currently trading down at 111.75.
Gold rose from 1199.81 earlier to 1215.20 and is currently trading down at 1211.40.
Dr. Copper is at 3.384 rising from 3.322 earlier.
The US dollar is trading between 80.60 and 80.70 and is currently trading down at 80.64, the bias is currently negative.
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Written by Gary