Written by Gary
Closing Market Commentary For 08-06-2014
We closed about where we were at yesterday's close and now investors have many questions regarding future direction of Mr. Market. Overall, the positives outweigh the negatives, BUT and that is a big 'but', the SP500 closed above the 100 DMA once again, along with SPY, but the DOW closed below the 145 DMA again.
By 4 pm volume was anemic for most of the afternoon looking like we have stalled in the middle of the crossroad. I swear I can hear a bear growling.
The DOW and the $RUT have the largest issues and until we see them rise, I do not expect the market to fair well.
The $NDX closed just above the 50 DMA and the NASDAQ closed below that line in the sand for the second session. What does this mean in layman's language? It means a lot of folks are scared of this much talked about correction we haven't had in several years and things are not going well in spite of the Fed's reassurances.
This mini-correction has gone on longer than previous ones by several days, but the decline has been about the same in percentage numbers. At this point I would expect the market to start rising and would love to see previous highs challenged.
The medium term indicators are leaning towards the hold side at the close. The all important signs of reversal, up or down, have not been observed so we are mostly, at best, neutral and conservatively holding. The important DMA's, volume and a host of other studies have not turned and that is not enough for me to start shorting. The SP500 MACD has turned down, but remains below zero at -7.62. I would advise caution in taking any position during this uncertain period although some technical indicators are starting to turn bearish.
Investing.com members' sentiments are 44 % bearish and when it switches over to bullish, as it did on Tuesday 8-5, watch for the market bottom to fall out some are saying, as the markets usually go against 'Sheeple' buying high and selling low.
StockChart.com Overbought / Oversold Index ($NYMO) is at -78.56. (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? Tuesday's (8-5) 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.
The markets are still susceptible to climbing on 'Bernankellen' vapor, use caution!
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The DOW at 4:00 is at 16443 up 14 or 0.08%.
The SP500 is at 1920 up 0.03 or 0.00%.
SPY is at 192.02 up 0.06 or 0.03%.
The $RUT is at 1126 up 4 or 0.36%.
NASDAQ is at 4355 up 2 or 0.05%.
NASDAQ 100 is at 3874 down 0.67 or -0.02%.
$VIX 'Fear Index' is at 16.37 down 0.50 or -2.96%. 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 sideways and flat.
WTI oil is trading between 98.12 (resistance) and 96.76 (support) today. The session bias is neutral and is currently trading down at 97.44.
Brent Crude is trading between 105.43 (resistance) and 104.55 (support) today. The session bias is negative with volatility spikes and is currently trading down at 104.88.
Gold rose from 1289.01 earlier to 1310.50 and is currently trading down at 1305.90. The current intra-session trend is elevated and sideways.
Dr. Copper is at 3.166 falling from 3.191 earlier.
The US dollar is trading between 81.77 and 81.46 and is currently trading down at 81.64, the bias is currently down, quiet with a negative slant.
Real Time Market Numbers
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Written by Gary