Written by Gary
Opening Market Commentary For 12-31-2013
Premarkets were up +0.14% on this last day of the year and remained steady when the S&P/Case-Shiller report shows home prices in 20 major metropolitan areas rose 0.2% from September to October, missing Wall Street estimates of a 0.7% pick-up.
Markets opened up at +0.20% and the DOW made a new high temporarily as the averages then slipped on low volume but remaining in the green. The NASDAQ, DOW and the SP500 all gaped up at the opening, but it is expected to close the gaps by the close at 4 pm today.
When the Institute for Supply Management - Chicago's PMI gauge reported falling in December to 59.1 from 63 in November, missing Street estimates of 61, the averages reacted positively, but again, on low volume. The SP500 eased up to a new high while the DOW tested this mornings high and then backed off.
It was expected earlier to have a quiet and slow session as many investors have taken today off leaving the HFT computers to jerk the numbers around. But that has been delayed because of the BTFDers jumping in on the 'not-so-good' news. The question is if the BTFDers made a correct decision?
As the US session starts, despite a dearth of news and activity in other markets, the precious metals complex is being smashed lower (on heavy volume).
Gold just hit 2013 lows at $1182 and Silver at $18.837 is near its 2013 lows also. (Has since recovered with abandon.)
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 16539 up 35 or 0.21%.
The SP500 is at 1845 up 4 or 0.20%.
SPY is at 184.19 up 0.37 or 0.20%.
The $RUT is at 1162 up 1.50 or 0.13%.
NASDAQ is at 4163 up 9 or 0.21%.
NASDAQ 100 is at 3578 up 8 or 0.23%.
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 99.39 and 98.20 today. The session bias is negative and is currently trading up at 98.64.
Brent Crude is trading between 111.52 and 110.50 today. The session bias is negative and is currently trading up at 110.84.
Gold rose from 1182.02 earlier to 1212.70 and is currently trading up at 1209.40.
Dr. Copper is at 3.380 falling from 3.390 earlier.
The US dollar is trading between 80.09 and 80.28 and is currently trading up at 80.23, the bias is currently positive.
To contact me with questions, comments or constructive criticism is always encouraged and appreciated:
Written by Gary