Market Commentary: Markets Depressed, DOW Down Triple Digits

August 1st, 2014
in Gary's blogging, midday post

Written by

Midday Market Commentary For 08-01-2014

By 11 am the melting down continued unabated on moderate to sometime heavy red volume. It would appear investors did not like the penetrations of several key averages support levels and are repositioning portfolios to safer ground for now.

By noon the averages were gaining speed in falling but still classified as melting as the DOW slips into triple digits. We are approaching a wait and see level and the red caution flags are flying.

Follow up:

Be especially alert for a reversal next week as one is expected generating some great buying opportunities.

The medium 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 and is below zero at -1.34. I would advise caution in taking any position during this uncertain period. members' sentiments are 51 % bearish and Investors Intelligence sets the breath at 62.7 % bullish with the status at Bear Correction. (Chart Here ) NYSE Bullish Percent Index ($BPNYA) is at 64.98. (Chart Here) Very close to support. S&P 500 Bullish Percent Index ($BPSPX) is at 74.60. (Chart Here)

The Market Is Overpriced But The Correction Will Likely Be Shallow Overbought / Oversold Index ($NYMO) is at -87.35. (Chart Here) (Need to type in $NYMO) Consumer Discretionary ETF (XLY) is at 65.55. (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." (Actually the support looks to be in the 66.88 range) We have entered an area that concerns me should the XLY drops any further. This chart clearly shows that dropping below 65.50 should be of a great concern to bullish investors should it remain there. The next green support line is a good guess to where the correction is going to go if we continue melting down.

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 12:00 is at 16550 down 13 or -0.08%.

The $RUT is at 1118 down 2 or -0.18%.

NASDAQ is at 4365 down 5 or -0.10%.

NASDAQ 100 is at 3892 down 1 or -0.02%.

$VIX 'Fear Index' is at 16.08 up 0.87 or 5.13%. 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 negative and the current bias is negative and sea-sawing.

How Oil Really Gets Priced

WTI oil is trading between 98.08 (resistance) and 97.08 (support) today. The session bias is sideways and is currently trading down at 97.30.

Brent Crude is trading between 106.12 (resistance) and 104.74 (support) today. The session bias is negative and is currently trading down at 104.88.

Gold rose from 1281.54 earlier to 1297.96 and is currently trading up at 1295.20. The current intra-session trend is elevated, sideways and volatile.

Dr. Copper is at 3.215 falling from 3.255 earlier.

The US dollar is trading between 81.60 and 81.25 and is currently trading down at 81.32, the bias is currently negative and volatile.


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To contact me with questions, comments or constructive criticism is always encouraged and appreciated:

Written by Gary


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