Written by Gary
Closing Market Commentary For 08-13-2014
The afternoon session was quiet, low volume and a very narrow trading zone which appears to be the end of a consolidation timeout that should lead to higher numbers.
By 4 pm the averages were deathly quiet with only the HFT algo computers at work. Investors are definitely nervous what the next few sessions are going to do. The reality is that we are still in the middle of the cross road and the markets could go either way.
This market needs to get its act together if we plan to see higher highs.
Worst Japanese consumer spending data drop ever - BTFD. China financing slowed - BTFD. European industrial production tumbled - BTFD.
US retail sales miss dramatically - BTFD. The worse the news the better the buy-the-dippiness as between JPY (102.50) and VIX (12 handle), US equities shrugged off shitty data and worsening geopolitics to jump to August highs.
But it wasn't just stocks... investors piled into Treasuries (slamming yields 7bps lower from pre-retail sales), bought gold (back over $1310), bid for US Dollars (now up 0.25% on the week), and lifted oil prices (WTI $97.50).
S&P futures volume was the worst of the week (50% below average). Notable oddities:
Copper clubbed today (-2% on the week), Brent-WTI jumped $1.50, and the VIX curve remains inverted for 14th day in a row.
The medium term indicators are leaning towards the hold side at the close. The all important signs of reversal, up or down, have not been observed so we are mostly, at best, neutral and conservatively holding. The important DMA's, volume and a host of other studies have not turned and that is not enough for me to start shorting. The SP500 MACD has turned flat, but remains below zero at -8.05. I would advise caution in taking any position during this uncertain period although some technical indicators are starting to turn bearish.
Investing.com members' sentiments are 44 % bearish and when it switches over to bullish, as it did on Tuesday 8-5, watch for the market bottom to fall out some are saying as the markets usually go against 'Sheeple' buying high and selling low.
StockChart.com Overbought / Oversold Index ($NYMO) is at -3.63. (Chart Here) (Need to type in $NYMO) Oversold conditions on the NYSE McClellan Oscillator usually bounce back at anything over -50. Being close to the zero mark is good but not out of the woods just yet.
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.
The DOW at 4:00 is at 16652 up 91 or 0.55%.
The SP500 is at 1947 up 13 or 0.67%.
SPY is at 195.00 up 1.31 or 0.68%.
The $RUT is at 1142 up 9 or 0.77%.
NASDAQ is at 4434 up 45 or 1.02%.
NASDAQ 100 is at 3949 up 44 or 1.13%.
$VIX 'Fear Index' is at 12.89 down 1.23 or -8.70%. Bullish Movement
(Follow Real Time Market Averages at end of this article)
The longer trend is up, the past months trend is net gain, the past 5 sessions have been positive and the current bias is elevated, but trading sideways.
WTI oil is trading between 97.75 (resistance) and 96.76 (support) today. The session bias is neutral, volatile and is currently trading up at 97.42. (Chart Here)
Brent Crude is trading between 105.13 (resistance) and 103.26 (support) today. The session bias is positive and is currently trading down at 104.82. (Chart Here)
Gold rose from 1306.09 earlier to 1316.17 and is currently trading up at 1313.00. The current intra-session trend is neutral, volatile and trending sideways. (Chart Here)
Dr. Copper is at 3.116 falling from 3.139 earlier. (Chart Here)
The US dollar is trading between 81.73 and 81.40 and is currently trading up at 81.67, the bias is currently sideways and quiet. (Chart Here)
The markets are still susceptible to climbing on 'Bernankellen' vapor, use caution!
"Investors should remember that excitement and expenses are their enemies. And if they insist on trying to time their participation inequities, they should try to be fearful when others are greedy and greedy only when others are fearful." - Warren Buffett
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.
Real Time Market Numbers
To contact me with questions, comments or constructive criticism is always encouraged and appreciated:
Written by Gary