Written by Gary
Midday Market Commentary For 05-01-2014
The SP500 climber up to its closing historical closing high and backed off sharply - is this a warning? The NASDAQ is below the 100 DMA, above the 145 DMA but still trending down.
By noon the DOW was flat and in the red while the others were in the green. These numbers are going to vacillate as the afternoon session progresses finally bringing joy to the traducers out there. I do not see any significant reason right now to buy or sell, but I sure advise to be alert.
There a lot bears out there, but I am betting they remember the warning signs of 2008 and plan not to get caught again.
Momentum names have taken a significant hit over the last month or more, and some despite solid earnings reports. It's a warning to the broader market which should be sold.
Richly valued high-beta shares are more sensitive to macro events and tend to lead the market upward and downward and to exaggerate moves dictated by broad drivers.
The issue is currently driving capital flows into value names, but I expect it will eventually lead to a full blown flight to safety.
More 'not-so-good' news.
Forget those old bull and bear analogies. Sam Stovall of S&P Capital IQ sees a toddler when he looks at the stock market today.
"Like an over-tired toddler resisting a nap, the S&P 500 continues to fight rather than surrender to the exhaustive callings of an overdue correction," the strategist wrote in a note out late Wednesday.
"Encouraged by a rebound in S&P 500 Q1 EPS growth expectations, now at 1.7% versus the earlier estimate of a 1.2% decline, combined with a stuttering stair-step ascent in economic growth, both the S&P 500 SPX +0.15% and DJIA DJIA +0.04% are closing in on all-time highs."
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 important DMA's, volume and a host of other studies have not turned, only a past 6% correction (and recovery) and that is not enough for me to start shorting. The SP500 MACD has turned up, but remains above zero at 6.55. I would advise caution in taking any position during this volatile transition period although Barchart.com shows a 32 % sell. (Remember this has been negative for weeks.) Investing.com members' sentiments are 69% bearish.
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 12:15 is at 16590 up 8 or 0.05%.
The SP500 is at 1887 up 3 or 0.14%.
SPY is at 188.61 up 0.30 or 0.16%.
The $RUT is at 1133 up 6 or 0.54%.
NASDAQ is at 4143 up 29 or 0.69%.
NASDAQ 100 is at 3605 up 23 or 0.64%.
$VIX 'Fear Index' is at 13.29 down 0.12 or 0.89%. neutral 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 up and the current bias is mixed, generally positive.
WTI oil is trading between 99.87 (resistance) and 98.75 (support) today. The session bias is positive and is currently trading down at 99.51.
Brent Crude is trading between 108.26 (resistance) and 106.86 (support) today. The session bias is mixed and is currently trading down at 107.31.
Gold fell from 1292.83 earlier to 1277.40 and is currently trading up at 1283.90. The current intra-session trend is positive.
Dr. Copper is at 3.024 falling from 3.032 earlier. (very volatile)
The US dollar is trading between 79.77 and 79.48 and is currently trading up at 79.57, the bias is currently positive.
Real Time Market Numbers
To contact me with questions, comments or constructive criticism is always encouraged and appreciated:
Written by Gary