Written by Gary
Midday Market Commentary For 03-21-2014
Good grief, a repeat of yesterday. Morning trading was in an elevated, but narrow band with one halfhearted attempt to test the SP500 once again. The small caps have remained in the red, but flat.
By noon the averages were barely trading as volume fell to anemic levels. Not much to report except that investors are really worried about a sudden reversal.
Now this is interesting. Just how much truth there is to this I do not know, but it could be a game changer.
While Europe is furiously scrambling to find alternative sources of energy should Gazprom pull the plug on natgas exports to Germany and Europe (the imminent surge in Ukraine gas prices by 40% is probably the best indication of what the outcome would be) . . .
Russia is preparing the announcement of the "Holy Grail" energy deal with none other than China, a move which would send geopolitical shock waves around the world and bind the two nations in a commodity-backed axis.
One which, as some especially on these pages, have suggested would lay the groundwork for a new joint, commodity-backed reserve currency that bypasses the dollar, something which Russia implied moments ago when its finance minister Siluanov said that Russia may regain from foreign borrowing this year.
Translated: bypass western purchases of Russian debt, funded by Chinese purchases of US Treasury's, and go straight to the source.
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 72 % sell.
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 12:30 is at 16427 up 96 or 0.59%.
The SP500 is at 1880 up 8 or 0.42%.
SPY is at 187.67 up 0.75 or 0.40%.
The $RUT is at 1206 up 7 or 0.57%.
NASDAQ is at 4316 down 4 or -0.08%.
NASDAQ 100 is at 3685 down 9 or -0.25%.
$VIX 'Fear Index' is at 13.93 down 0.59 or -4.06%. Bullish Movement
The longer trend is up, the past months trend is positive, the past 5 sessions have been mixed and the current bias is negative.
WTI oil is trading between 98.26 and 100.23 today. The session bias is positive and is currently trading down at 99.82. (Tested 100 and has backed off and looks to be headed down again.)
Brent Crude is trading between 106.01 and 107.75 today. The session bias is positive and is currently trading down at 107.38. (Brent may also be headed down)
Gold rose from 1329.72 earlier to 1343.00 and is currently trading up at 1335.80. The current intra-session trend is negative.
Dr. Copper is at 2.954 rising from 2.916 earlier.
The US dollar is trading between 80.50 and 80.18 and is currently trading down at 80.31, the bias is currently sideways.
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Written by Gary