Written by Gary
Closing Market Commentary For 06-10-2014
The afternoon session was dreadfully quiet with anemic volume. Not a good sign for a bunch of euphoric bulls - more like a wake for the dead. The DOW managed to climb above yesterday's closing and only the NASDAQ 100 managed stayed clearly in the green while the other major averages were flat and mixed.
By 4 pm the averages looked asleep and showing signs of weakness that may carry over in tomorrow's session in a negative fashion. Even the close was a nonevent as there was only a few nondescript trades as the HFT computer tried to push the numbers higher.
Several years ago I wrote that the Mom and Pop investors were for the most part long gone after getting their butts kicked in 2008 and the volatility traders enjoyed then may be lost to history. There are going to be a lot of older traders that going to opt-out of this casino market and find something else to do.
"Relative to the past 50 years, this stock market has been abandoned and orphaned even as it had made participants wealthy," writes Bill Smead, drawing on a Howard Gold report showing only 37.7% of global investable assets were in equity at the end of 2012, the lowest since 1959 when records first began being kept.
Why? The mass movement to fixed income, the trendy move towards wide-asset allocation at the expense of plain-vanilla large-cap U.S. equities, the rise of alternative investing, and the echo-boomers - born between 1977 and 1996 - have been much slower to get married, have kids, buy houses, and invest in stocks than previous generations.
Smead's prediction: As rates rise over the next 10 years, fixed-income will sour and equity dividend payout ratios will normalize. Further returns from commodities and other esoteric asset classes won't match their once-in-a-lifetime moves from 1999-2012 and investors will lose interest. Rising rates will make LBOs less economic and private equity returns will decline.
"The lack of affection for US large cap equities will mute declines and reward patient long-duration owners of quality common stocks."
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 up, but remains above zero at 18.72. I would advise caution in taking any position during this volatile transition period although Barchart.com shows a 40 % sell. (Up from 32% sell this morning) Investing.com members' sentiments are 67 % bearish and Investors Intelligence sets the breath at 67 % bullish with the status at Bear Correction.
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 4:00 is at 16946 up 3 or 0.02%.
The SP500 is at 1951 down 0.47 or -0.02%.
SPY is at 195.63 up 0.02 or 0.01%.
The $RUT is at 1173 down 3.17 or -0.27%.
NASDAQ is at 4338 up 2 or 0.04%.
NASDAQ 100 is at 3801 up 5 or 0.13%.
$VIX 'Fear Index' is at 11.04 down 0.11 or -0.99%. 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 depressed and flat.
WTI oil is trading between 105.05 (resistance) and 103.99 (support) today. The session bias is positive and volatile and is currently trading up at 104.61.
Brent Crude is trading between 109.50 (resistance) and 108.46 (support) today. The session bias is positive and is currently trading up at 109.09.
Maybe I'm Wrong - Justifying $2,000+ Gold by Jeffrey Dow Jones
Gold rose from 1262.49 earlier to 1263.30 and is currently trading down at 1266.60. The current intra-session trend is sideways and quiet.
Dr. Copper is at 3.059 rising from 3.028 earlier.
The US dollar is trading between 80.88 and 80.57 and is currently trading up at 80.83, the bias is currently elevated and sideways.
Real Time Market Numbers
To contact me with questions, comments or constructive criticism is always encouraged and appreciated:
Written by Gary