Written by Gary
Closing Market Commentary For 08-05-2014
Not a good day for the DOW as it crossed over the 145 DMA and stopped short of the 200 DMA (16333 which happens to be a major support) by 36 points - bullish. The SP500 touched the 100DMA and retreated but closed below a support at 1924 - bearish.
By 4 pm the averages looked beat-up, but many analysts believe this session is just a successful test of supports working. Be careful at this crossroad and look for sudden reversals.
Without a doubt we are at a crossroads of sorts, watching if the averages will penetrate supports in the coming sessions, fall below major DMA's or reverse course and continue upwards to test prior highs. The latter is what some analysts are expecting before markets 'start' retreating at the end of September. This isn't to say we won't have some more negative sessions, but the worst is over many are saying.
Last week's take-down of stocks, with the S&P 500 delivering its worst weekly performance in two years, has undoubtedly put a chill down many an investor's spine. But strategists were coming out of the woodwork on Monday to say, 'Chill out, people.'
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 below zero at -5.45. I would advise caution in taking any position during this uncertain period although some technical indicators are starting to turn bearish.
Investing.com members' sentiments are 43 % bearish and when it switches over to bullish, as it did today, watch for the market bottom to fall out some are saying as the markets usually go against 'Sheeple' buying high and selling low.
StockChart.com Overbought / Oversold Index ($NYMO) is at -65.71. (Chart Here) (Need to type in $NYMO) Oversold conditions on the NYSE McClellan Oscillator usually bounce back at anything over -50, but this time things may be different - where have I heard this before? Today's numbers are definitely not a good sign.
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. (see tomorrows chart.)
The markets are still susceptible to climbing on 'Bernankellen' vapor, use caution!
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The DOW at 4:00 is at 16429 down 140 or -0.84%.
The SP500 is at 1920 down 19 or -0.97%.
SPY is at 191.86 down 1.88 or -0.47%.
The $RUT is at 1126 down 1.52 or -0.97%.
NASDAQ is at 4353 down 31 or -0.71%.
NASDAQ 100 is at 3875 down 34 or -0.87%.
$VIX 'Fear Index' is at 16.87 up 1.75 or 11.57%. Bearish Movement
(Follow Real Time Market Averages at end of this article)
The longer trend is up, the past months trend is sideways, the past 5 sessions have been negative and the current bias is down and sideways.
WTI oil is trading trending up 98.66 (resistance) and 97.21 (support) today. The session bias is negative and is currently trading up at 97.42.
Brent Crude is trading between 105.65 (resistance) and 104.11 (support) today. The session bias is trending up and is currently trading up at 104.63.
Gold fell from 1294.39 earlier to 1283.56 and is currently trading up at 1288.70. The current intra-session trend is negative and volatile.
Dr. Copper is at 3.201 falling from 3.248 earlier.
The US dollar is trading between 81.70 and 81.37 and is currently trading down at 81.59, the bias is currently sideways and quiet.
Real Time Market Numbers
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Written by Gary