Written by Gary
Midday Market Commentary For 12-30-2013
By noon the gainers and losers on the NYSE were 50-50 while volume was at anemic levels and further melting down is expected testing the morning lows.
Another quiet session just before the New Year and I have to admit I would like to sneak out of the office early today and pretend that tomorrow is a holiday, but alas I do enjoy having a job.
Be sure to read the closing market commentary today for an interesting discussion (with charts) on how the indexes are pushing beyond their limits setting Mr. Market up for an ugly reversal.
"It's going to put my family and me out on the streets," is a perspective shared by many of the 1.3 million Americans about to lose their emergency unemployment claims.
The program, started during the recession, was intended to help jobless people after they exhausted state benefits, typically lasting six months.
House Republicans resisted continuing the benefits without budget cuts elsewhere to cover the cost. As Bloomberg reports, opponents say the extended benefits discourage the unemployed from accepting jobs and that the program should be curtailed, given the recovery in the nation's labor market.
This has profound implications for the oh-so-important unemployment rate that the Fed is so dependent upon... (Read More)
The short term indicators are leaning towards the sell side at the midday, 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. Especially today after the Santa Claus Rally pushed the markets up to reach new highs. A correction is expected, how much is the question - AND when?
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 12:30 is at 15482 up 4 or 0.02%.
The SP500 is at 1839 down 2 or -0.10%.
SPY is at 183.67 down 0.18 or -0.10%.
The $RUT is at 1161 up 0.13 or 0.01%.
NASDAQ is at 4152 down 4 or -0.10%.
NASDAQ 100 is at 3568 down 6 or -0.16%.
The longer trend is up, the past months trend is bullish, the past 5 sessions have been bullish and the current bias is negative.
WTI oil is trading between 100.43 and 99.18 today. The session bias is negative and is currently trading down at 99.25.
Brent Crude is trading between 112.63 and 110.91 today. The session bias is negative and is currently trading up at 111.03.
Gold fell from 1215.80 earlier to 1200.30 and is currently trading up at 1205.40.
Dr. Copper is at 3.384 falling from 3.392 earlier.
The US dollar is trading between 80.58 and 80.05 and is currently trading up at 80.12, the bias is currently negative.
To contact me with questions, comments or constructive criticism is always encouraged and appreciated:
Written by Gary