Written by Gary
Midday Market Commentary For 03-17-2014
Averages are off the session highs dropping from 1.2% levels to just above 1% as the averages trade sideways in a relatively narrow range on anemic volume.
By noon the markets reaction to Obama's Crimean/Russkie problematic and fluid issues there was a non-event. Averages are still trending sideways as we await what the Russians have to say, however, the caution flag is out as it has been for several weeks.
The problem investors face today is where are we and what is going to happen. There are no quick or reliable answers as the following article depicts.
The stock market goes down for a week and the bears are coming out of hibernation. We are starting to see more posts like Hale Stewart's More signs of a US equity market top. For bulls and bears alike, it was time to take the weekend, relax, and review the upside and downside risks in the broad market averages. Here is what the US equity market seems to be worried about, in no particular order:
Chinese slowdown and financial tail-risk
Falling corporate earnings
The short term indicators are leaning towards the hold side at the midday. 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 40 % sell. (was 100% sell at the opening)
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 to turn downhill, but not convincingly signaling a down trend as it is very weak. Lastly, the markets are oversold and the margin debt for stock purchases are at an all time high.
In looking at the 50 DMA the current SP500 is above that line, but way above the 200 DMA and on 02-06-14 crossed above the 100. I can not see, as of right now where the MA's are rolling over to indicate any permanent bear run in fact quiet the opposite. The 50 DMA is flatting slightly, but not descending which is always the first sign the bears are smacking their lips in anticipation of a medium rare steak.
What is currently causing problems for the Emerging Markets is directly related to the tapering and most investors are considering this factor along with the Argentine Peso and the Chinese Banking woes. The tension in Ukraine and Crimea along with proposed sanctions against Russia are also negatively effecting the World markets. All along we have assumed the Fed's will continue the taper program - so far, they are moving ahead and a lot of 'sheeples' are jumping in the markets on what I think is a sinking ship of fools.
The Best Stock Market Indicator Update says the market is untradable. The OEXA200R ended the week at 80%, down from 82% last weekend.
Of the three secondary indicators:
- RSI is NEGATIVE (below 50).
- MACD is NEGATIVE (black line below red).
- Slow STO is POSITIVE (black line above red).
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The DOW at 12:15 is at 16230 up 165 or 1.03%.
The SP500 is at 1858 up 16 or 0.89%.
SPY is at 186.27 up 2 or 0.88%.
The $RUT is at 1189 up 7 or 0.62%.
NASDAQ is at 4286 up 40 or 0.95%.
NASDAQ 100 is at 3669 up 41 or 1.13%.
$VIX 'Fear Index' is at 15.72 down 2.10 or -11.78%. Bullish Movement
The longer trend is up, the past months trend is positive, the past 5 sessions have been negative and the current bias is positive, but sideways.
WTI oil is trading between 98.90 and 97.20 today. The session bias is negative and is currently trading down at 97.34.
Brent Crude is trading between 108.58 and 106.25 today. The session bias is negative and is currently trading down at 106.56.
Gold fell from 1392.43 earlier to 1375.11 and is currently trading up at 1376.80. The current intra-session trend is negative.
Dr. Copper is at 2.956 up from 2.922 earlier.
The US dollar is trading between 79.69 and 79.42 and is currently trading up at 79.49, the bias is currently negative.
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Written by Gary