Market Commentary: Averages Slide Up To New Daily Highs Despite Falling Volume

February 7th, 2014
in Gary's blogging, midday post

Written by

Midday Market Commentary For 02-07-2014

Markets survived the dip at 10:15 by climbing higher by 12:00 with the concern that the rise is solely by the HFT computers and brain-dead 'sheeples'. The volume is falling and the averages are rising as sure recipe for a fall-off in the near future unless the taper isn't going to happen.

By 12 the averages started to trade sideways and within a narrow band giving hope to bullish traders that closing above the 1773 demarcation is a good sign to resume partying.

Follow up:

The short term indicators are leaning towards the buy side at the midday, but I would advise caution in taking any position during this volatile transition period of Mr. Market trying to figure out which way he wants to go. As it stands right now I do not have much in what Mr. Market has up his sleeve as the bulls and the bears both have convincing arguments why the markets should go up or that the markets should go down. Remember, corrections during a pronounced negative market movements are to be expected regardless of the overall trend.

There is pressure to climb higher if only to test the previous Blue Chip highs, but we may have to see some more 'correction' before we can start counting our 'Bulls'.

Also, have to watch out for these overnight negative emerging market news announcements which many are pundits unsubstantiated guesses and rumors which can make markets move dramatically. Make sure you have stops in place if you are not in a position to monitor the markets.

The longer 6 month outlook is now 30-70 sell and will remain bearish until we can see what the effects are in the game of the Fed's 'Tapering'. By March investors should know how the taper and emerging markets are going to work out in relationship to the stability of the US financial markets and their ability to not to slide further downward. The middle of March should, may, perhaps be the end of any correction.

For now, I am continuing to expect weak to negative markets for the foreseeable future.

The Best Stock Market Indicator Update says the market is untradable.

What I am really afraid of is that if a serious 'Black Swan' pops up, the resultant market decent would wipe out a lot of profits and undoubtedly be the start of a bear market. This 'house of cards' the Fed has built is fragile and would not take a lot to tear it down.

Again, 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 couple of months. Removing 10 to 20 billion from the bond buying program each month isn't going to do much in reducing the QE program at first, but if it can be cut in half by the end of March 2014 certainly will. We are assuming the Fed's will continue the taper program - so far, they are moving ahead in spite of the emerging market worries.

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 or expand the program later in the year - especially should the employment rate suddenly start to increase. Also, watch for QE5 when Obamacare starts drags the economy down into trouble in 2015.

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 is being 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.

If you would like to get advanced buy/sell tweets, sign-up in the column to the right of this post by clicking on the 'Follow' button.

The DOW at 12:15 is at 15713 up 85 or 0.54%.

The SP500 is at 1787 up 13 or 0.76%.

SPY is at 178.74 up 1 or 0.69%.

The $RUT is at 1112 up 9 or 0.77%.

NASDAQ is at 4104 up 47 or 1.16%.

NASDAQ 100 is at 3540 up 42 or 1.21%.

$VIX 'Fear Index' is at 15.51 down 1.72 or -9.98%. Bullish

The longer trend is up, the past months trend is sideways, the past 4 sessions have been positive and the current bias is positive.

How Oil Really Gets Priced

WTI oil is trading between 97.13 and 98.57 today. The session bias is positive and is currently trading up at 98.45.

Brent Crude is trading between 106.90 and 108.46 today. The session bias is positive and is currently trading down at 108.31.

Gold fell from 1271.59 earlier to 1256.41 and is currently trading down at 1262.00.

Analysts forecast a corrosive year for copper prices

Dr. Copper is at 3.239 rising from 3.222 earlier.

The US dollar is trading between 81.09 and 80.64 and is currently trading down at 80.84, the bias is currently sideways with a positive slant.

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


Written by Gary


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