Written by Gary
Midday Market Commentary For 06-13-2014
Volume has fallen to anemic levels as the averages rolled over from the morning highs and are trending sideways at the noon hour and remaining in the green.
Iraq remains in the forefront of investors minds as we await direction from the White House, zzzzzzzzzzzzzzzzzzzzz!
In the meantime, buckle up investors, next week could be one heck of a ride. Caution is warranted.
From stocktiming.com were have two charts one showing 'negative divergence' and the falling volume since 2009. Neither, paint a rosy picture for the bulls.
A Reality Check ... Part Two:
Last week we posted a weekly DJI chart showing how the volume has dramatically shrunk. (The update of this chart is the second chart seen below.
However, this morning, we would like to show you a monthly chart of the NYA Index that goes back 14 years. I plotted an 11 month Relative Strength Indicator so that you could see the changes in strength as the NYA moved over time.
If you look at this chart, you will see that the NYA Index has recently made a higher/high while the RSI has made a lower/high. This is called a "negative divergence" in the stock market.
Typically, negative divergences do not kick in until Inflowing Liquidity levels drop and are not enough to keep pushing the market higher. (This is one of the reasons why we publish the Inflowing Liquidity levels every day.)
The updated DJI weekly chart with its low volume is below. The positive about this is that it is easier for the Fed to influence the market when the volumes are low. The negative is that it will be easier for panic to set in and/or for the Fed to be overwhelmed.
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 down, but remains above zero at 16.09. I would advise caution in taking any position during this volatile transition period although Barchart.com shows a 88 % sell. Investing.com members' sentiments are 65 % bearish and Investors Intelligence sets the breath at 67.3 % bullish with the status at Bear Correction.
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The DOW at 12:30 is at 16772 up 38 or 0.23%.
The SP500 is at 1935 up 5 or 0.27%.
SPY is at 194.06 up 0.54 or 0.28%.
The $RUT is at 1162 up 3 or 0.24%.
NASDAQ is at 4310 up 13 or 0.29%.
NASDAQ 100 is at 3777 up 13 or 0.35%.
$VIX 'Fear Index' is at 12.00 down 0.56 or -4.46%. Bullish 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 net negative and the current bias is sideways and volatile.
July Brent crude hit a nine-month high of $114.69/bbl earlier today, but has since stabilized at ~$113 after the IEA said Iraqi oil supplies are not at immediate risk; most of Iraq's oil production, export facilities and reserves are in the largely Shia areas in the south, where Islamist rebels enjoy little support.
But such a forecast assumes the conflict doesn't spread; if it does, there is "no doubt" that Brent could reach $125/bbl and beyond, says PVM Oil Associates' David Hufton, who adds that Saudi Arabia has 2M bbl/day of capacity it can turn on fairly quickly but that leaves no spare capacity margin.
Even if the insurgents don't advance to the south, the long-feared fragmentation of Iraq along sectarian lines has been set in motion, which damages the outlook for investment and production growth in Iraq in coming years, a period when Iraqi supply additions are critical to market balances, according to analysts at Energy Aspects.
WTI oil is trading between 107.67 (resistance) and 106.40 (support) today. The session bias is negative and is currently trading up at 106.85.
Brent Crude is trading between 114.07 (resistance) and 112.16 (support) today. The session bias is sideways and is currently trading down at 112.58.
Maybe I'm Wrong - Justifying $2,000+ Gold by Jeffrey Dow Jones
Gold fell from 1277.48 earlier to 1270.99 and is currently trading up at 1274.20. The current intra-session trend is sideways and volatile.
Dr. Copper is at 3.032 falling from 3.041 earlier.
The US dollar is trading between 80.72 and 80.44 and is currently trading down at 80.69, the bias is currently positive.
Real Time Market Numbers
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Written by Gary