Written by Gary
Midday Market Commentary For 03-25-2014
Just like yesterday the averages are off their morning highs and are trending down only to reverse course in the afternoon.
By noon the averages were mostly in the green, but flat on low volume. Small caps were in the red and the DOW was up +0.30%. Again, the caution flags are out and investors need to be especially alert for sudden reversals.
The market is weak and has been for years and it wouldn't take much of bad news to take it down. QE has been the 'Market Viagra' up to now and if was not for all the 'Sheeples' and other market manipulations, this market might be headed downward. The markets are currently in a sideways trend and consolidation can be good for further advances, but it can also mean there isn't enough strength to move if forward.
Bulls continue to climb a wall of worry, as the latest "bricks in the wall" created by Russia, slowing growth in China, and Fed tapering fades into the mosaic.
It seems that the doomsayers are helping keep the bull market from getting out of control -- and keeping it healthy.
Among the ten U.S. business sectors, Telecom, Financial, and Technology were each up more than 2% last week. Utilities is still the leader year-to-date, followed by Healthcare.
Our SectorCast fundamentals-based rankings reflect a neutral to slightly bullish near-term bias.
Our Sector Rotation Model suggests holding Technology, Financial, and Healthcare. Also discussed are some highly-ranked ETFs and individual stock ideas.
Oh the dashed hopes... Just as we warned earlier... the dreams that yesterday was the dip to get back in and ride the waves of central bank largesse to another double in your favorite social media or Biotech stock are fading fast.
Today is an almost perecect replay of yesterday's market action so far... pre-open Gold dump, JPY pump to sustain stocks at highs, spark retail bounce buyers back in and pros sell into strength . . .
as the "high growth" momentum stocks and Biotechs all reverse earlier gains in a hurry as all major stock indices are once again red post-Yellen.
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 16 % sell.
The Best Stock Market Indicator Update says the market is tradable. The OEXA200R ended the week at 84%, up from 80% last weekend.
Of the three secondary indicators:
- RSI is POSITIVE (above 50).
- MACD is POSITIVE (black line above red).
- Slow STO is POSITIVE (black line above red).
My feeling is that we're entering the final euphoria phase of the five-year stock market bull, and I'll be watching warily for major resistance points in the coming months.
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The DOW at 12:00 is at 16318 up 43 or 0.26%.
The SP500 is at 1858 up 1 or 0.05%.
SPY is at 185.55 up 0.12 or 0.06%.
The $RUT is at 1174 down 4 or -0.32%.
NASDAQ is at 4212 down 15 or -0.37%.
NASDAQ 100 is at 3607 down 11 or -0.30%.
$VIX 'Fear Index' is at 14.91 down 0.18 or -1.19%. Neutral Movement
The longer trend is up, the past months trend is positive, the past 5 sessions have been sideways and the current bias is positive.
WTI oil is trading between 100.21 and 98.82 today. The session bias is mixed and is currently trading down at 99.86. (Earlier it dropped from100.21 to 98.82 and turned around and climbed back up to 100.21 where it is now slowly melting downwards.)
Brent Crude is trading between 107.44 and 106.45 today. The session bias is also mixed and very volatile and is currently trading down at 107.17.
Gold rose from 1306.70 earlier to 1316.47 and is currently trading down at 1311.60. The current intra-session trend is mixed and volatile.
Dr. Copper is at 3.008 rising from 2.940 earlier.
The US dollar is trading between 79.90 and 80.32 and is currently trading up at 80.31, the bias is currently positive.
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Written by Gary