Written by Gary
Closing Market Commentary For 04-02-2014
Low volume and new historic highs for the SP500 is not a good combination - or is it? The large institutions are sitting pretty tight, the HFT are jerking the markets around and the few 'sheeples' buying are not enough to move the markets in big swings. So what is happening - I'll let you guess with a slew of worried investors?
At 3:30 pm the SP500 took a gigantic gap upwards (2 points) setting another new historic high for the day at 1892.94 and the DOW set a new historical high at 16588.13 as well. All of this is now being blamed on HFT algo computers - who would have ever guessed?
By 4 pm the SP500 and the DOW set new historical highs and closing highs but done on less that favorable technicalities.
I know I have been warning readers continually to be ready for a sudden reversal, because we all know it is coming and our proprietary indicators says it will.
Though the mainstream financial media and the blogosphere differ radically on their forecasts - the MFM sees near-zero systemic risk while the alternative media sees a critical confluence of it . .
They agree on one thing: the Federal Reserve and the "too big to fail" (TBTF) Wall Street banks have their hands on the political and financial tiller of the nation, and nothing will dislodge their dominance.
In addition, the U.S. dollar's status as a reserve currency is a key component of U.S. global dominance. Were the dollar to be devalued by Fed/Wall Street policies to the point that it lost its reserve status, the damage to American influence and wealth would be irreversible.
What if there is another possibility to the consensus view that the Fed/Wall Street will continue to issue credit and currency with abandon until the inevitable consequence occurs, i.e. the dollar is devalued and loses its reserve status.
What if Wall Street's power has peaked and is about to be challenged by forces that it has never faced before. Put another way, the power of Wall Street has reached a systemic extreme where a decline or reversal is inevitable.
The 3:30 spike was evidently caused by HFT algo computers.
As if to prove all the HFT naysayers right, milliseconds before 3:30 pm - the traditional time when HFT algos come out and ramp stocks into the last half hour of the day . . .
A massive E-mini order block slammed the tape, driven by a tremor in the USDJPY, sending the DJIA green for the year in the most unriggedly of manners.
The short term indicators are leaning towards the hold side at the close with a finger ready on the sell button. 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, 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. The MACD has turned down slightly, but remains above zero. I would advise caution in taking any position during this volatile transition period although Barchart.com shows a 72 % sell. (Remember this has been negative for weeks.)
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The DOW at 4:00 is at 16573 up 40 or 0.24%.
The SP500 is at 1891 up 5.38 or 0.29%.
SPY is at 188.79 up 0.63 or 0.33%.
The $RUT is at 1193 up 20 or 1.69%.
NASDAQ is at 4276 up 8 or 0.20%.
NASDAQ 100 is at 3666 up 8 or 0.21%.
$VIX 'Fear Index' is at 13.09 down 0.01 or -0.08%. Neutral Movement
(Follow Real Time Market Numbers at bottom of article)
The longer trend is up, the past months trend is positive, the past 5 sessions have been sideways and the current bias is elevated but descending at the close.
WTI oil is trading between 100.21 and 98.90 today. The session bias is mixed, mostly sideways and is currently trading up at 99.38.
Brent Crude is trading between 105.33 and 103.95 today. The session bias is negative and is currently trading up at 104.72.
Gold rose from 1278.92 earlier to 1294.63 and is currently trading down at 1290.10. The current intra-session trend is elevated, but trending down at the close.
Dr. Copper is at 3.038 falling from 3.073 earlier.
Fed's Bullard said this morning "that inflation has bottomed out and inflation below 1% could prompt action" but any Fed action to prevent lower inflation would likely push $US dollar lower.
The US dollar is trading between 80.13 and 80.43 and is currently trading up at 80.38, the bias is currently sideways and steady.
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Written by Gary