Market Commentary: DOW Can Not Hold Highs, Closes Below Previous Closing High

July 17th, 2014
in Gary's blogging, market close

Written by

Closing Market Commentary For 07-17-2014

The Averages melted down during the afternoon session mostly because of investors worries of war escalation in the Ukraine.

By 4 pm the selloff concluded with a burst of heavy red volume and the major averages off nearly 2%. The DOW that put in a new historic high earlier couldn't even keep the previous closing high at the closing bell.

Follow up:

I think this will blow over in the next few sessions and the markets will recover nicely. Tragic yes, world financially destabilizing, no, at least not just yet.

Stocks Plunge, Gold/VIX Spike On Worst Airline Tragedy Since 9/11

Despite an initial attempt to rally after the terrible news out of Ukraine hit, stocks were unable to mount any serious BTFD as uncertainty spread.

Despite Bullard's best efforts, bond yields crashed lower (over 7bps today) with 10Y at 2.45% near the lowest close in 13 months. Gold prices jumped over $20 (even as the USD Index flatlined - though JPY strengthened notably as risk-off set in).

VIX exploded 3.7 vols (its biggest swing - 45% - since Aug 2011). Equity markets cratered into the close as Israel ground invasion news (A White House Lockdown) added to the concerns leaving all US markets red post-payrolls and red post-Yellen.

The S&P 500 dropped 1.18% - its biggest drop in 3 months. The Russell 2000 is now down 2.5% year-to-date.

The medium 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 down, but remains above zero at 10.97. I would advise caution in taking any position during this uncertain period. shows a 88 % sell. (Been at 88% for the last 6 sessions, I think their meter is broken) members' sentiments are 56 % bearish and Investors Intelligence sets the breath at 67.4 % bullish with the status at Bear Correction. (Chart Here ) NYSE Bullish Percent Index ($BPNYA) is at 72.53. (Chart Here ) S&P 500 Bullish Percent Index ($BPSPX) is at 83.00. (Chart Here ) Consumer Discretionary ETF (XLY) is at 66.89. (Chart Here )

Chris Ciovacco says, "As long as the consumer discretionary ETF (NYSEARCA:XLY) holds above 67.06, all things being equal, it is a good sign for stocks and the U.S. economy." Well it has dropped below 67.06 - NOW WHAT?

The markets are still susceptible to climbing on 'Bernankellen' vapor, use caution!

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 16977 down 161 or -0.94%.

The SP500 is at 1958 down 23 or -1.18%.

SPY is at 195.88 down 2.25 or -1.14%.

The $RUT is at 1134 down 18 or -1.56%.

NASDAQ is at 4363 down 63 or -1.41%.

NASDAQ 100 is at 3878 down 54 or 1.38%.

$VIX 'Fear Index' is at 14.54 up 3.54 or 32.18%. Bearish 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 negative.

How Oil Really Gets Priced

WTI oil is trading between 103.06 (resistance) and 101.27 (support) today. The session bias is positive, trending up and is currently trading up at 103.18.

Brent Crude is trading between 108.22 (resistance) and 106.81 (support) today. The session bias is positive and is currently trading up at 107.91.

Gold prices sink as worries over Europe that drove prices up last week dissipate

Gold fell from 1308.86 earlier to 1299.47, reverse direction, shot up to 1324.30 (and climbing) and is currently trading up at 1319.50. The current intra-session trend is positive and volatile.

Dr. Copper is at 3.216 rising from 3.202 earlier. Yesterday copper fell from 3.253 to the 3.202 this morning.

The US dollar is trading between 80.62 and 80.65 and is currently trading down at 80.59, the bias is currently positive and volatile.

Real Time Market Numbers

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Written by Gary

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