Written by Gary
Closing Market Commentary For 05-08-2014
The DOW closed in the green and everything else close in the red. Volume picked up as the averages melted down and the $VIX mirrored the SP500 charts. What does today's action mean? I haven't the slightest idea. One guess is that we are witnessing a roll-off of the averages from their previous tops, small caps has already started.
By 4 pm the averages had slithered up +0.05% to regain some losses, but the bears in the wings are starting their BBQ's in hopes of a nice steak soon.
Talk of head and shoulders and other negative trends may or may not be relevant at this time, but the fact the markets are showing a great reluctance to move higher is something I am watching closely.
US equity price action warns of trouble, BofAML's Macneil Curry warns. Since the start of this year, Tuesdays have consistently resulted in positive returns for US equities.
But this week's failure to follow through with that pattern, coupled with the Russell 2000's first close below the 200-day moving-average since November 2012, warns of trouble ahead.
Indeed, the Russell is dangerously close to completing a 4 month "Head-and-Shoulders Top".
A close below 1099 is needed to complete the pattern, exposing significant downside to 1057 (5-year trendline), ahead of 988/975 (Head-and-Shoulders obj.).
The short term indicators are leaning towards the hold 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 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 64 % buy. (Remember this has been negative for weeks.) Investing.com members' sentiments are 70 % bearish.
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The DOW at 4:00 is at 16551 up 32 or 0.20%.
The SP500 is at 1876 down 3 or -0.14%.
SPY is at 187.74 down 0.21 or -0.11%.
The $RUT is at 1097 down 11 or -1.00%.
NASDAQ is at 4052 down 16 or -0.40%.
NASDAQ 100 is at 3540 down 6 or -0.17%.
$VIX 'Fear Index' is at 12.95 up 0.45 or 3.36%. 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 negative.
WTI oil is trading between 100.87 (resistance) and 99.87 (support) today. The session bias is negative and is currently trading up at 100.27.
Brent Crude is trading between 108.24 (resistance) and 107.38 (support) today. The session bias is sideways and volatile and is currently trading up at 108.00.
Gold fell from 1295.50 earlier to 1285.68 and is currently trading down at 1289.00. The current intra-session trend is sideways.
Dr. Copper is at 3.059 rising from 3.027 earlier.
The US dollar is trading between 79.93 and 79.49 and is currently trading up at 79.47, the bias is currently sideways and quiet.
Real Time Market Numbers
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Written by Gary