Market Commentary: Markets Coast Along Yesterday's High Water Mark On Falling Volume

January 8th, 2014
in Gary's blogging, midday post

Written by

Midday Market Commentary For 01-08-2014

The SP500 shot up to yesterday's high mark reversing the mornings low mark, traded sideways for 45 minutes and then started to melt downward before melting back up again. Confused? The market is too!

By noon the Blue Chips remained in the red while the small caps are enjoying the green, daily volume falls to anemic levels and investors are hoping the bear is sleeping.


Follow up:

The short term indicators are pointing strongly towards the sell side at the midday, but I would still advise caution in taking any position during this volatile transition period.

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.

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.

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 to signify a market top.

The DOW at 12:00 is at 16478 down 53 or -0.32%.

The SP500 is at 1839 up 1 or 0.07%.

SPY is at 183.73 up 0.25 or 0.12%.

The $RUT is at 1159 up 1 or 0.12%.

NASDAQ is at 4171 up 18 or 0.43%.

NASDAQ 100 is at 3573 up 15 or 0.42%.

The longer trend is up, the past months trend is bullish, the past 10 sessions have been sideways and the current bias is sideways.

How Oil Really Gets Priced

WTI oil is trading between 94.18 and 92.85 today. The session bias is negative and is currently trading down at 93.16.

Brent Crude is trading between 107.94 and 107.03 today. The session bias is negative and is currently trading down at 107.58.

Gold fell from 1231.16 earlier to 1218.81 and is currently trading down at 1220.80.

Here's why copper has lost its indicator role

Dr. Copper is at 3.358 falling from 3.376 earlier.

The US dollar is trading between 81.27 and 81.02 and is currently trading down at 81.05, the bias is currently negative.

To contact me with questions, comments or constructive criticism is always encouraged and appreciated:

gary@econintersect.com

 

Written by Gary

 















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