Market Commentary: Averages Waterfall, Small Caps Off Over 3.0%, Beginning Of A Market Crash?

April 10th, 2014
in Gary's blogging, market close

Written by

Closing Market Commentary For 04-10-2014

Markets closed down, way down, but most importantly the SP500 closed BELOW the all important support of 1839 after failing a challenge of that now resistance. It also closed below the 50 DMA, the NASDAQ closed below the 145 DMA and the DOW closed at the 50 DMA.

By 4 pm the averages were solidly depressed with the small caps off OVER 3.0% and the SPY and SP500 off over 2.0%. This is a bad for the markets and I suspect more to come. OK, the image is a bit dramatic, but you have to admit that today's decline is out of the ordinary.


Follow up:

Is the market walking up as Marc Faber says? The oils, gold, copper and the US dollar didn't drop very much, I would keep a sharp eye open and see where these go in the morning.

Marc Faber Warns "The Market Is Waking Up To How Clueless The Fed Is"

"I think it's very likely that we're seeing, in the next 12 months, an '87-type of crash," warns a somewhat excited sounding Marc Faber, adding that he thinks "it will be worse."

The pain is just getting started as Faber notes that "the market is slowly waking up to the fact that the Federal Reserve is a clueless organization." Internet and Biotech sectors (growth stocks) are "highly vulnerable because they're in cuckoo land in terms of valuations," and fully expects the selling to spread . . .

The Fed "have no idea what they're doing. And so the confidence level of investors is diminishing," and that means we will see a major decline.

Stocks drop as investors dump biotech and other former favorites; Nasdaq sinks 3.1 percent

NEW YORK (AP) - The Nasdaq had its worst day since 2011 as investors dumped biotechnology shares and other industries that have soared over the past year.

Biogen Idec, Gilead Sciences and other biotech companies plunged. After a huge run-up, those stocks have become volatile in recent weeks amid scrutiny over the cost of their drugs.

Facebook and Twitter, other recent investor favorites, also dropped.

The Nasdaq composite index lost 129 points, or 3.1 percent, to close 4,054, its biggest drop since November 2011.

The Dow Jones industrial average fell 266 points, 1.6 percent, to 16,170.

The short term indicators are leaning towards the sell 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 important DMA's, 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 8 % sell. (Huh? Not sure how this was figured.)

If you would like to get advanced buy/sell tweets, sign-up in the column to the right of this post by clicking on the 'Follow' button. Write me with suggestions and I promise not to bite.

The DOW at 4:00 is at 16170 down 267 or -1.62%.

The SP500 is at 1833 down 39 or -2.09%.

SPY is at 183.23 down 3.94 or -2.10%.

The $RUT is at 1128 down 32 or -2.78%.

NASDAQ is at 4054 down 130 or -3.10%.

NASDAQ 100 is at 3488 down 113 or -3.13%.

$VIX 'Fear Index' is at 15.89 up 2.07 or 14.98%. Bearish Movement

(Follow Real Time Market Averages at end of this article)

The longer trend is up, the past months trend is sideways, the past 5 sessions have been mixed and the current bias is negative.

How Oil Really Gets Priced

WTI oil is trading between 103.79 (resistance) and 103.14 (support) today. The session bias is mixed and sideways and is currently trading down at 103.31.

Brent Crude is trading between 107.88 (resistance) and 107.26 (support) today. The session bias is mixed and is currently trading down at 107.32.

Gold rose from 1307.72 earlier to 1324.90 and is currently trading down at 1318.20. The current intra-session trend is sideways.

Analysts forecast a corrosive year for copper prices

Dr. Copper is at 3.039 rising from 3.021 earlier.

The US dollar is trading between 79.64 and 79.39 and is currently trading down at 79.47, the bias is currently negative.

Real Time Market Numbers

 

 

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To contact me with questions, comments or constructive criticism is always encouraged and appreciated:

gary@econintersect.com

 

Written by Gary

 









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