Written by Gary
Closing Market Commentary For 03-12-2014
The averages coasted along sideways for most of the afternoon session on anemic volume as the morning highs were tested but went nowhere.
By 4 pm only the DOW was in the red while the other major averages were in the green with the small caps up +0.40%. The averages are stung tight waiting for the next news event to send them one way or another. Stay tuned and caution is highly suggested.
The short term indicators are leaning towards the hold side at the close. The all important signs of reversal, up or down, have not been observed so we are mostly, at best, neutral and conservatively holding. The 50DMA, MACD, volume and a host of other studies have not turned, only a 6% correction (and recovery) and that is not enough for me to start shorting. I would advise caution in taking any position during this volatile transition period although Barchart.com shows a 16% buy.
Several notes of negativity are that the daily volume is very low matching the period of historical highs in the past which could set the stage for addition weakness and market decline. The longer MACD view is starting uphill, but not convincingly signaling a continued up trend as it is very weak. Lastly, the markets are oversold and the margin debt for stock purchases are at an all time high.
I still believe that Mr. Market is STILL not through playing with us and even newer historical highs are a distinct possibility beyond what we have seen, mainly because the amount of bond buying the Fed still does on a monthly basis. It is its ending that worries me the most as the financial institution can not continue to push upwards without the Fed's 'Market Viagra'.
There is continuing pressure to climb higher, but we may have to see some more 'consolidation' or sideways trading before we can start counting our 'Bulls'. The old historical closing high at 1859 (now 1878) is no longer and there are many serious doubts that the SP500 can go higher much higher. I am not saying it can't go higher but that it will be tough sledging in light of prevailing financial winds.
The longer 6 month outlook is now 40-60 sell and will remain slightly bearish until we can see what the effects are in the Fed's 'Tapering' game plan. 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 April 2014 certainly will.
My inner instincts tell me there is also a possibility 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.
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.
The Best Stock Market Indicator Update says the market is untradable. The OEXA200R ended the week at 82%, unchanged from last weekend.
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The DOW at 4:00 is at 16340 down 11 or -0.07%.
The SP500 is at 1868 up 0.57 or 0.03%.
SPY is at 187.33 up 0.05 or 0.03%.
The $RUT is at 1191 up 4.32 or 0.36%.
NASDAQ is at 4323 up 16 or 0.37%.
NASDAQ 100 is at 3707 up 16 or 0.42%.
$VIX 'Fear Index' is at 14.46 down 0.34 or -2.30%. Neutral Movement
The longer trend is up, the past months trend is positive, the past 5 sessions have been mostly negative and the current bias is negative.
WTI oil is trading between 100.41 and 97.56 today. The session bias is negative and is currently trading down at 98.11.
Brent Crude is trading between 107.81 and 106.92 today. The session bias is neutral and is currently trading down at 107.46.
Gold rose from 1345.75 earlier to 1371.20 and is currently trading down at 1367.10. The current intra-session trend is neutral.
Dr. Copper is at 2.955 falling from 3.036 earlier.
The US dollar is trading between 79.96 and 79.65 and is currently trading up at 79.69, the bias is currently neutral.
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Written by Gary