Written by Gary
Opening Market Commentary For 06-30-2014
Premarkets ranged from being down -0.07% to flat and opened the same way.
By 10 am the markets were sea-sawing sideways with the small caps in the green and the large caps in the red slightly trending up all on anemic volume. The US Chicago Purchasing Manager came in lower and US Pending Home Sales for May came in much higher than expected which sent the Large Caps up to Friday's closing numbers. Then the low volume sideways march continued as investors continued their worry stance. Where are the BTFD bulls now?
Oils ore sliding up, the US dollar is melting down as the Chicago PMI Drops, Misses By Most Since March which didn't move the markets but the US Pending Home Sales did. The Pending Home Sales Jump In May; Drop YoY For 8th Month In A Row as they came in at -6.9% better than the -9.0% expected.
The short term indicators are leaning towards the hold side at the opening. 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 14.34. I would advise caution in taking any position during this volatile period.
Barchart.com shows a 72 % buy. Investing.com members' sentiments are 59 % bearish and Investors Intelligence sets the breath at 68.7 % bullish with the status at Bear Correction.
StockChart.com NYSE Bullish Percent Index ($BPNYA) is at 73.80.
StockChart.com S&P 500 Bullish Percent Index ($BPSPX) is at 83.00.
(Click on $BPNYA or $BPSPX to see chart)
Bottom line here is that I have not seen any serious bears jumping out of the woods just yet, although I am VERY concerned that ANY minor correction could turn nasty in a heart beat. One significant signal would be daily losses in any of the major averages that go over the 'magic' 3 % and then you need to pay close attention to risk-off tactics. There hasn't been a 10% correction in several years and some investors are becoming increasingly concerned an imminent correction is on the way.
In Lance Roberts article he asks, Is The Market Consolidating Or Topping?
There are two ways to look at stagnation in the markets. It is either a consolidation process that works off an overbought condition which leads to further advances, OR it is a topping process that leads to a market decline. Discerning which process is currently "in play" is critical for investor decision making.
Let me be clear. I am not stating that the current consolidation process will absolutely collapse into a sharp correction in the months ahead. However, I am stating that the current environment is more similar to past markets which did correct, than not.
While it is certainly possible that the markets could ratchet higher from here due to the "psychological momentum" that currently exists, the likelihood of a runaway bull market from here is remote.
The longer 6 month outlook is now 35-65 sell and will remain bearish until we can see what the effects are in the Fed's 'Tapering' game plan, Russia's annexing game playing and of course the World's newest player Iraq. I would also take chart and other technical indicators with a lessor degree of reliability for the time being and watch what the Janet Yellen's Fed does over the next couple of months. Also, the margin debt has been very high and as of Monday, 4-7-2014, it stood at $466 billion. (Read More at NYSE Statistics Archive) (It has since gone down slightly, but remains high.)
Several additional notes of negativity where investors are worried about issues directly related to factors of the Argentine default, South African Rand and Japan. And of course, China's defaulting businesses are dropping like flies. Now the Second Chinese Bond Company Defaults, First High Yield Bond Issuer and Another Chinese High Yield Bond Issuer Declares Bankruptcy. Iraq Anxiety Pushes Oil to Three-Month High is just another notch in the bears gun.
The markets are still susceptible to climbing on 'Bernankellen' vapor, use caution!
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The DOW at 10:15 is at 16864 up 13 or 0.08%.
The SP500 is at 1964 up 3 or 0.14%.
SPY is at 196.13 up 0.28 or 0.14%.
The $RUT is at 1189 down 0.28 or -0.02%.
NASDAQ is at 4409 up 11 or 0.24%.
NASDAQ 100 is at 3854 up 10 or 0.25%.
$VIX 'Fear Index' is at 11.31 up 0.05 or 0.44%. Neutral Movement
(Follow Real Time Market Averages at end of this article)
The longer trend is up, the past months trend is up, the past 5 sessions have been net neutral and the current bias is elevated and sideways.
WTI oil is trading between 105.72 (resistance) and 105.09 (support) today. The session bias is positive and is currently trading up at 105.61.
Brent Crude is trading between 112.80 (resistance) and 112.32 (support) today. The session bias is positive and is currently trading down at 112.66.
Maybe I'm Wrong - Justifying $2,000+ Gold by Jeffrey Dow Jones
Gold rose from 1311.20 earlier to 1316.78 and is currently trading up at 1315.90. The current intra-session trend is sideways and volatile.
Dr. Copper is at 3.175 rising from 3.163 earlier.
The US dollar is trading between 80.08 and 79.99 and is currently trading down at 79.99, the bias is currently negative.
Real Time Market Numbers
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Written by Gary