Written by Gary
Closing Market Commentary For 08-18-2014
DOW closes up triple digits, NASDAQ closes higher since 2000 and Ukraine fears fade as stocks push higher – just as I said they would.
By 4 pm the averages were sailing higher and a test of previous highs might be in the cards as the Bulls don their party hats.
But the closer we get to previous historic highs the more cautious and concerned I get. A lot can happen between now and then with some investors moving to a 30% cash position. Just saying . . . Our proprietary market direction meter is showing negative short term, not sure how this going to translate over the next several days, remain cautious.
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 up, but remains below zero at -2.22. 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 48 % 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.
Investors Intelligence sets the breath at 58.3 % bullish with the status at Bear Confirmed. (Chart Here )
StockChart.com NYSE Bullish Percent Index ($BPNYA) is at 63.06. (Chart Here) Very close to support, but rising.
StockChart.com S&P 500 Bullish Percent Index ($BPSPX) is at 71.80. (Chart Here) Remains below support, now resistance.
StockChart.com Overbought / Oversold Index ($NYMO) is at 29.57. (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 reverse after reaching +40 oversold.
StockChart.com Consumer Discretionary ETF (XLY) is at 67.72. (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 4:00 is at 16839 up 176 or 1.06%.
The SP500 is at 1972 up 17 or 0.85%.
SPY is at 197.36 up 1.64 or 0.84%.
The $RUT is at 1158 up 17 or 1.47%.
NASDAQ is at 4508 up 43 or 0.97%.
NASDAQ 100 is at 4020 up 33 or 0.83%.
$VIX ‘Fear Index’ is at 12.32 down 0.83 or -6.31%. Neutral Movement
(Follow Real Time Market Averages at end of this article)
The longer trend is up, the past months trend is net , the past 5 sessions have been positive and the current bias is positive.
Oil resumes decline as “speculative steam” exits via banks
WTI oil is trading between 97.41 (resistance) and 93.43 (support) today. The session bias is negative and is currently trading down at 93.80. The is a very large gap at 97.06 and these types of gaps are usually filled sooner rather than later. It would not surprise me to see the oils move back up in the near future. (Chart Here) (Look at the 15 minute.)
Brent Crude is trading between 103.65 (resistance) and 101.16 (support) today. The session bias is negative and is currently trading up at 101.75. (Chart Here)
Gold fell from 1311.30 earlier to 1296.68 and is currently trading down at 1299.50. The current intra-session trend is sideways. (Chart Here)
Dr. Copper is at 3.111 rising from 3.094 earlier. (Chart Here)
The US dollar is trading between 81.66 and 81.48 and is currently trading up at 81.63, 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
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Written by Gary
