Market Commentary: Markets Open Up, Then Turn Down

August 29th, 2014
in Gary's blogging, market open

Written by

Opening Market Commentary For 08-29-2014

Premarkets were up +0.20% and the markets opened the same way, but began to reverse course immediately melting downward on low volume.

By 10 am the large caps were in the red and the small caps while about even and in the green, were about to turn red. Hard to detect a session trend as any morning weakness usually turns back up somewhat.

Follow up:

If I had to guess a trend, I would choose one that is trending down.

History made as euro-zone overnight borrowing costs turn negative

The rate euro-zone banks charge each other for overnight loans turned negative for the first time ever Thursday.

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The medium term indicators are leaning towards the hold side at the opening. 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, but now I am very concerned. The SP500 MACD has turned flat, but remains above zero at 12.41. I would advise caution in taking any position during this uncertain period although some technical indicators have starting to turn bearish. members' sentiments are 56 % 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 60.7 % bullish with the status at Bear Confirmed. (Chart Here ) NYSE Bullish Percent Index ($BPNYA) is at 64.96. (Chart Here) Very close to resistance now and rising. S&P 500 Bullish Percent Index ($BPSPX) is at 75.80. (Chart Here) Remains below support, now resistance. 10 Year Treasury Note Yield Index ($TNX) is at 23.41. (Chart Here) Treasury Yield Curve Approaches Flattest Since 2009. Overbought / Oversold Index ($NYMO) is at 26.82. (Chart Here) (Need to type in $NYMO) It is now around the area where it turns and starts 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 68.67. (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, 8-27-2014, XLY edged up to 69.03 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 10:15 is at 17049 down 31 or -0.18%.

The SP500 is at 1996 down 0.79 or -0.04%.

SPY is at 199.91 down 0.17 or -0.09%.

The $RUT is at 1166 down 0.19 or -0.02%.

NASDAQ is at 4559 up 1 or 0.02%.

NASDAQ 100 is at 4067 up 1 or 0.03%.

$VIX 'Fear Index' is at 12.32 up 0.27 or 2.24%. Neutral Movement

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

(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 net negative and the current bias is negative.

How Oil Really Gets Priced

WTI oil is trading between 95.47 (resistance) and 94.47 (support) today. The session bias is positive and is currently trading down at 95.32. (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 103.14 (resistance) and 102.63 (support) today. The session bias is positive and is currently trading down at 102.94. (Chart Here)

Why Gold Will Rise When The Dollar Falls

Gold fell from 1292.05 earlier to 1284.36 and is currently trading up at 1287.50. The current intra-session trend is trending up. (Chart Here)

Dr. Copper is at 3.163 rising from 3.151 earlier. (Chart Here)

The US dollar is trading between 82.60 and 82.46 and is currently trading down at 82.54, the bias is currently neutral 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

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Written by Gary


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