Written by Gary
Midday Market Commentary For 05-07-2014
I keep reminding readers to watch out for bear and bull traps and just plain old reversals likw we had today. The averages fell down to some serious red levels this morning and the current lot of Wall Street crooks, malcontent financial wizards and HFT algo computers turned the markets around. By noon the SOB's moved the DOW to new session highs and halved the small cap losses. But before I could finish the last sentence, the averages were sliding off the tops.
Volatility is good for trading, but bad for investors, especially the bullish ones looking for stability. The averages have made over 1% changes this morning and that makes me cautious.
Sounds like the Fed is 'back peddling' and using politically correct language that they think there is a problem and don't know what to do about it. But, then what is new about that?
In mid February Fed's Tarullo first opined on the "stretched valuations" in small and high-tech companies in the US - while careful not to label the entire market a bubble.
It seems, given Janet Yellen's comments today, that this is the new meme...
*YELLEN SEES POCKETS OF POSSIBLE OVER-VALUATION IN SMALL CAPS (So don't fight the Fed! Sell!)
*YELLEN SAYS EQUITY MARKET VALUATIONS ARE IN HISTORICAL RANGES
And then there's this:
Yellen: Can't Detect Asset Bubbles With Any Certainty
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 flat, but remains above zero at +5.44. I would advise caution in taking any position during this volatile transition period although Barchart.com shows a 80 % buy. (I am not so sure about this.) Investing.com members' sentiments are 61 % bearish.
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The DOW at 12:15 is at 16363 up 109 or 0.67%. (and falling)
The SP500 is at 1874 up 6 or -0.34%.
SPY is at 187.47 up 0.68 or 0.36%.
The $RUT is at 1102 down 5 or -0.50%.
NASDAQ is at 4049 down 31 or -0.76%.
NASDAQ 100 is at 3531 down 25 or -0.70%.
$VIX 'Fear Index' is at 13.61 down 0.19 or -1.38%. 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 sideways and the current bias is positive.
WTI oil is trading between 100.97 (resistance) and 99.79 (support) today. The session bias is sideways and volatile and is currently trading down at 100.70.
Brent Crude is trading between 107.89 (resistance) and 106.97 (support) today. The session bias is positive and volatile and is currently trading up at 107.80.
Gold fell at an alarming rate from 1314.67 earlier to 1292.16 and is currently trading down at 1292.90. The current intra-session trend is negative. (and volatile.)
Dr. Copper is at 3.032 falling from 3.061 earlier.
The US dollar is trading between 79.12 and 79.28 and is currently trading down at 79.21, the bias is currently trending up and very volatile.
Real Time Market Numbers
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Written by Gary