Market Commentary: Markets Slip On Ukraine Conflict News, Volume Currently Falling

August 15th, 2014
in Gary's blogging, midday post

Written by

Midday Market Commentary For 08-15-2014

Well, that wasn't pretty when the averages suddenly took a plunge at 10:45 am and is still trending lower because of the Ukraine troops destroying part of the "armed" Russian convoy. The volume up to that point was anemic then turned to heavy and has been falling since.

Follow up:

I am going out on a limb by saying that this new 'conflict' will fade away just like the previous ones with a caveat. The number of World incidences is placing a severe strain on the financial markets and could send them in a tail-spin at some point. So buy the dip as we haven't finished going up just yet!

Reports of renewed conflict in Ukraine wipe out US stock market gain

NEW YORK (AP) - Reports of renewed fighting in Ukraine are sending stocks lower in midday trading. Major U.S. indexes are still headed for a solid gain for the week.

Stocks opened higher but turned lower in mid-morning trading Friday following reports that Ukrainian soldiers attacked a Russian military convoy that had entered the country.

Bond prices rose as investors sought safety, driving the yield on the 10-year Treasury note down to 2.32 percent, its lowest level this year. The Dow Jones industrial average was down 78 points, or 0.5 percent, to 16,635 as of noon Eastern time. It was up 61 points earlier.

Ukrainian president: We destroyed most Russian military vehicles that came across the border

KAMENSK-SHAKHTINSKY, Russia (AP) - NATO and Ukraine said Russian military vehicles did cross into Ukraine during the night and the Ukrainian president said most of them were destroyed by his troops.

A statement on President Petro Poroshenko's website said that he and British Prime Minister David Cameron spoke by telephone about the reports from some Western journalists that Russian APCs were seen crossing into Ukraine near the point where a Russian aid convoy was parked.

"The president informed that the given information was trustworthy and confirmed because the majority of the machines had been eliminated by Ukrainian artillery at night," the statement said. Poroshenko did not include any proof for his statement. NATO secretary-general Anders Fogh Rasmussen said the alliance had observed a Russian "incursion" into Ukraine.

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 up, but remains below zero at -5.40. I would advise caution in taking any position during this uncertain period although some technical indicators are starting to turn bearish. members' sentiments are 47 % bearish.

Investors Intelligence sets the breath at 58.3 % bullish with the status at Bear Confirmed. (Chart Here ) NYSE Bullish Percent Index ($BPNYA) is at 62.52. (Chart Here) Very close to support. S&P 500 Bullish Percent Index ($BPSPX) is at 71.20. (Chart Here) Remains below support, now resistance.

The Market Is Overpriced But The Correction Will Likely Be Shallow (and it was) Overbought / Oversold Index ($NYMO) is at +35.77. (Chart Here) (Need to type in $NYMO) It is now around the area where it turns and start to descend, but any thing below 30 / 40 is a concern. Oversold conditions on the NYSE McClellan Oscillator usually bounce back at anything over -50 and the reverse is true at +40. Consumer Discretionary ETF (XLY) is at 66.82. (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.

The DOW at 12:15 is at 16598 down 115 or -0.69%.

The SP500 is at 1945 down 10 or -0.51%.

SPY is at 194.74 down 1 or -0.53%.

The $RUT is at 1133 down 10 or -0.90%.

NASDAQ is at 4434 down 19 or -0.42%.

NASDAQ 100 is at 3958 down 10 or -0.26%.

$VIX 'Fear Index' is at 14.37 up 1.95 or 15.78%. Bearish Movement

(Follow Real Time Market Averages at end of this article)

The longer trend is up, the past months trend is net positive, the past 5 sessions have been positive and the current bias is negative.

How Oil Really Gets Priced

WTI oil is trading between 96.89 (resistance) and 95.32 (support) today. The session bias is positive and is currently trading down at 96.56. (Chart Here)

Brent Crude is trading between 103.69 (resistance) and 102.06 (support) today. The session bias is positive and is currently trading down at 103.22. (Chart Here)

Why Gold Will Rise When The Dollar Falls

Gold fell from 1316.45 earlier to 1293.91, reversed course and is currently trading up at 1308.80. The current intra-session trend is positive. (Chart Here)

Dr. Copper is at 3.100 falling from 3.104 earlier. (Chart Here)

The US dollar is trading between 81.67 and 81.41 and is currently trading down at 81.51, the bias is currently negative and volatile. (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.

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Written by Gary


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