Market Commentary: Averages Sliding Downward, Small Caps At -0.60%, Low Volume

September 3rd, 2014
in Gary's blogging, midday post

Written by

Midday Market Commentary For 09-03-2014

Markets continue to melt downward going into the noon hour on low volume, sometime reaching anemic levels. All but the DOW are printing red numbers with the SP500 and SPY flat and the small caps are headed south.

By noon there appears to be no hope for an up day, but we have see the averages recover 0.30% by the close.

Follow up:

What is interesting is the DOW has reached it historical highs on three occasions and has bounced back, not being able to penetrate the resistance. The first one was on 7-17-2014 at 17151, the second was at 17153 on 8-26-14 and the third was today at 17151.

Have we reached a top?

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, but now I am very concerned. The SP500 MACD has turned up, but remains above zero at 13.19. I would advise caution in taking any position during this uncertain period although some technical indicators have starting to turn bearish. members' sentiments are 60 % 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 61.4 % bullish with the status at Bear Confirmed. (Chart Here ) NYSE Bullish Percent Index ($BPNYA) is at 65.92. (Chart Here) Very close to resistance now and rising. S&P 500 Bullish Percent Index ($BPSPX) is at 76.20. (Chart Here) Remains below support, now resistance. 10 Year Treasury Note Yield Index ($TNX) is at 24.28. (Chart Here) Treasury Yield Curve Approaches Flattest Since 2009. Overbought / Oversold Index ($NYMO) is at 29.82. (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 68.76. (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) This chart clearly shows that dropping below 65.50 should be of a great concern to bullish investors. Tuesday, 9-2-2014, XLY edged up to 69.17 and that is another notch in the gun signaling that we might have another reversal very soon - at least to cover the gap below at 67.85. Protect thyself!

The DOW at 12:00 is at 17087 up 19 or 0.11%.

The SP500 is at 1999.73 down 2.52 or -0.13%.

SPY is at 200.43 down 0.20 or -0.10%.

The $RUT is at 1174 down 5 or -0.43%.

NASDAQ is at 4569 down 39 or -0.63%.

NASDAQ 100 is at 4066 down 30 or -0.74%.

$VIX 'Fear Index' is at 12.54 up 0.28 or 2.29%. Bearish Movement

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

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

How Oil Really Gets Priced

WTI oil is trading between 94.65 (resistance) and 93.06 (support) today. The session bias is positive and is currently trading up at 94.39. (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 5H time scale.)

Brent Crude is trading between 102.28 (resistance) and 100.45 (support) today. The session bias is elevated and sideways and is currently trading down at 101.86. (Chart Here)

Why Gold Will Rise When The Dollar Falls

Gold rose from 1262.10 earlier to 1272.00 and is currently trading up at 1269.40. The current intra-session trend is trending up. (Chart Here)

Dr. Copper is at 3.134 falling from 3.167 earlier. (Chart Here)

The US dollar is trading between 83.07 and 82.86 and is currently trading down at 82.93, the bias is currently sideways 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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