Market Commentary: SP500 Melts Up Higher, But New Bullish Investors Are Needed

August 21st, 2014
in Gary's blogging, midday post

Written by

Midday Market Commentary For 08-21-2014

Several times this morning the SP500 rose to new historic highs by a few cents. The current high of 1992.65 is 1.26 point above the 7-24-2014 high validating my claim Mr. Market is not done playing with us. Now the question begins, is he done with us?

By noon it seemed reasonable that the action for the day was behind us until we can get a new batch of BTFDers and 'Sheeples' to jump in and get their toes wet.

Follow up:

Is this the market high? Are we going higher? What's next? All excellent questions that I wish I could answer. If I could I would be able to retire tomorrow.

Unloved no more? Investor bullishness hits 2014 high

This old bull market is finally finding a little love as the S&P 500 SPX +0.20% pushes yet again into record turf. Will it be its undoing?

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 above zero at +5.50. I would advise caution in taking any position during this uncertain period although some technical indicators have starting to turn bearish. 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 59.0 % bullish with the status at Bear Confirmed. (Chart Here ) NYSE Bullish Percent Index ($BPNYA) is at 63.66. (Chart Here) Very close to support, but rising. S&P 500 Bullish Percent Index ($BPSPX) is at 72.80. (Chart Here) Remains below support, now resistance. Overbought / Oversold Index ($NYMO) is at 49.75. (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. Wednesday, 8-20-2014, $NYMO climbed to +58.24 is signaling a market reversal in our near future. Consumer Discretionary ETF (XLY) is at 68.52. (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. Wednesday 8-20-2014, XLY edged up to 68.68 and that is another notch in the gun signaling that we might have another reversal very soon - at least to cover the gap below. Protect thyself!

The DOW at 12:00 is at 17046 up 66 or 0.39%.

The SP500 is at 1991 up 4 or 0.21%.

SPY is at 199.35 up 0.42 or 0.21%.

The $RUT is at 1156 down 2 or -0.14%.

NASDAQ is at 4524 down 2 or -0.05%.

NASDAQ 100 is at 4042 up 1 or 0.04%.

$VIX 'Fear Index' is at 11.71 down 0.07 or -0.59%. Neutral 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 elevated and sideways.

How Oil Really Gets Priced

WTI oil is trading between 94.26 (resistance) and 92.63 (support) today. The session bias is positive and is currently trading up at 94.22. (Chart Here) There 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 very near future. (Chart Here) (Look at the 60 minute time scale.)

Brent Crude is trading between 102.41 (resistance) and 101.20 (support) today. The session bias is positive and is currently trading up at 102.31. (Chart Here)

Why Gold Will Rise When The Dollar Falls

Gold fell from 1292.16 earlier to 1274.54 and is currently trading down at 1277.50. The current intra-session trend is negative and trending sideways. (Chart Here)

Dr. Copper is at 3.177 rising from 3.150 earlier. (Chart Here)

The US dollar is trading between 82.41 and 82.15 and is currently trading down at 82.19, the bias is currently trending down. (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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