Written by Gary
Closing Market Commentary For 05-21-2014
The 2 pm Fed meeting minutes stirred up a lot of volatility with the bears jumping ship and the BTFDers jumping in to save the day. Volume is still low and the late afternoon market rise indicates HFT algo computers at work.
Markets closed higher, but remained in a persistent and narrow sideways trading zone that has more negative aspects than positive ones. Investors are concerned regarding future gains believed not to be on Mr. Markets plan of action. Anyone care to guess what Mr. Market is going to do tomorrow?
Nothing has changed with Ms. Yellen apparently, the FOMC minutes seems to be that the Fed sees no inflation risk in feeding job growth. In other words, perfection.
FOMC Minutes Show Fed Fears No Inflation Risk; Worries About Complacency, Discusses "Low Level Of Volatility"
These are the minutes from an FOMC meeting that raised economic assessments for the year the day that Q1 GDP printed at +0.1%. No big surprises from the minutes...
*FED SAW NO INFLATION RISK IN FUELING JOB GROWTH, MINUTES SHOW
*FOMC PARTICIPANTS SAW 'NEARLY BALANCED' RISKS TO ECONOMY
*A NUMBER OF FOMC PARTICIPANTS SAW POSSIBLE RISK IN WEAK HOUSING
*SEVERAL FOMC PARTICIPANTS SAID LOW VOLATILITY MAY SIGNAL RISK
More of the same from the FOMC minutes - which have been carefully prescribed to reflect just enough confusion as to provide every stock bull (and bond bear) with just enough ammo to BTFD once more unto the breach.
With 2 Fed speakers yesterday and 4 today, it seems the Fed is keen to interpret the minutes for everyone through the only tool they have left - communications...
Volatility is a concern due to complacency; low rates have consequences; new normal terminal rate lower than historical norm; taper will proceed; doves more dovish, hawks more hawkish.
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 and that is not enough for me to start shorting. The SP500 MACD has turned flat, but remains above zero at 4.71. I would advise caution in taking any position during this volatile transition period although Barchart.com shows a 0 % hold. (Not so bullish this afternoon.) Investing.com members' sentiments are 66 % bearish.
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The DOW at 4:00 is at 16491 up 159 or 0.97%.
The SP500 is at 1888 up 15 or 0.81%.
SPY is at 189.10 up 1.58 or 0.84%.
The $RUT is at 1104 up 6 or 0.52%.
NASDAQ is at 4132 up 35 or 0.85%.
NASDAQ 100 is at 3636 up 35 or 0.98%.
$VIX 'Fear Index' is at 11.91 down 1.05 or -8.10%. Bullish 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 neutral and the current bias is positive.
WTI oil is trading between 104.23 (resistance) and 102.40 (support) today. The session bias is negative and is currently trading down at 103.78.
Brent Crude is trading between 110.69 (resistance) and 109.62 (support) today. The session bias is negative and is currently trading up at 110.43.
Gold fell from 1296.35 earlier to 1283.36 and is currently trading down at 1291.60. The current intra-session trend is sideways.
Dr. Copper is at 3.126 falling from 3.144 earlier.
The US dollar is trading between 80.35 and 79.94 and is currently trading down at 80.12, the bias is currently negative and volatile.
Real Time Market Numbers
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Written by Gary