Midday Market Commentary For 06-09-2014
Markets continued their opening gains by the large caps again posting new highs, but on lower volume at 1955.55 and 16970.17 respectively.
By noontime the averages had pulled back from the morning highs somewhat without any new direction defined, temporarily at least.
From StockTiming.com suggesting that not all is well with the disparity of the $RUT and the SP500.
Normally, a high P/E Ratio suggests that investors are expecting higher earnings growth in the future compared to companies with a lower P/E.
I bring this up today because the P/E Ratio for the Russell 2000 Index was 84.39 last Friday. The expectations are getting pretty high because the healthy average P/E Ratio for the S&P 500 during the past 100+ years is considered to be around 15 by many investors (while it exhibited a high/low range of 4.78 to 44+).
So, a reading of 84.39 has an expectation that the companies in the Russell 2000 are either going to take off to the upside or they will prove to be overvalued with the Russell dropping lower.
(There are always helpful links on the internet that provide good data for reality checks. One such source is the Wall Street Journal's link provided today.
Here is the link: http://online.wsj.com/mdc/public/page/2_3021-peyield.html)
This link reports on the daily Price/Earning levels of various indexes. Here are last Friday's P/E Ratios for the S&P 500, the NDX, and the Russell 2000. Pay special attention to the Russell's P/E Ratio.
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 and that is not enough for me to start shorting. The SP500 MACD has turned up, but remains above zero at 18.38. I would advise caution in taking any position during this volatile transition period although Barchart.com shows a 32 % sell. Investing.com members' sentiments are 66 % bearish and Investors Intelligence sets the breath at 66.1 % bullish with the status at Bear Correction - chart is on a p&f sell but is rising without having moved above 68%.
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The DOW at 12:00 is at 16963 up 40 or 0.23%.
The SP500 is at 1955 up 5 or 0.27%.
SPY is at 195.93 up 0.57 or 0.28%.
The $RUT is at 1179 up 14 or 1.22%.
NASDAQ is at 4346 up 25 or 0.58%.
NASDAQ 100 is at 3804 up 9 or 0.24%.
$VIX 'Fear Index' is at 11.06 up 0.33 or 3.08%. Neutral Movement
(Follow Real Time Market Averages at end of this article)
The longer trend is up, the past months trend is positive, the past 5 sessions have been positive and the current bias is positive.
WTI oil is trading between 104.23 (resistance) and 102.62 (support) today. The session bias is positive and is currently trading down at 103.97.
Brent Crude is trading between 109.29 (resistance) and 107.79 (support) today. The session bias is positive and is currently trading down at 108.05.
Maybe I'm Wrong - Justifying $2,000+ Gold by Jeffrey Dow Jones
Gold fell from 1257.24 earlier to 1252.46 and is currently trading up at 1253.00. The current intra-session trend is negative.
Dr. Copper is at 3.043 falling from 3.061 earlier.
The US dollar is trading between 80.70 and 80.32 and is currently trading up at 80.68, the bias is currently elevated and sideways.
Real Time Market Numbers<p><iframe src="http://eqrates.investing.com/index.php?pairs_ids=277;347;6408;243;282;346;396;238;284;247;240;260;241;271;316;352;6974;7888;26490;8193;308;6369;280;301;251;8082;267;8177;287;272;252;334;8115;409;402;305;651;295;474;469;333;667;7997;7992;&header-text-color=%23FFFFFF&curr-name-color=%230059b0&inner-text-color=%23000000&green-text-color=%232A8215&green-background=%23B7F4C2&red-text-color=%23DC0001&red-background=%23FFE2E2&inner-border-color=%23CBCBCB&border-color=%23cbcbcb&bg1=%23F6F6F6&bg2=%23ffffff&last_update=hide" width="600" height="960" frameborder="0" scrolling="no"></iframe></p>
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<p><strong><span style="font-family: arial,helvetica,sans-serif;"><span style="font-size: medium;">Written by <a rel=""author"" href="/files/gary.htm">Gary</a></span></span></strong></p>