Written by Gary
Closing Market Commentary For 09-03-2014
The averages generally melted down after gaping up at the opening, but failed to keep the new SP500 high or close higher. Whether or not we see the averages move up again at the opening is secondary to lack of investor participation. It is very obvious that the retail trade is sitting on their hands.
By 4 pm the volume had risen slightly as it usually does at the close, but remained low. Is it time for an exit?
China, second largest World's economy, is preparing for slowing growth and the U.S. markets are continuing to hit new highs almost every week. There is a real disconnect on Wall Street and investors should be cautious.
The real economy continues in the tank, despite what you hear in the mainstream news.
Trading at a PE of 17 times.
S&P PE ratios are at nosebleed levels.
. . . that isn't stopping Wall Street whores from trying to suck in small investors, as always happens near a top.
. . . the Fed has been pumping money into the stock market.
Regarding the potential for a decline in the equity markets, keep in mind that we are continuing to hold short positions in Japanese and U.S. debt and equity markets. So far this year, those bets have not paid off. But 2014 still has four months to go. Time will tell, but I'm not about to back out of those short positions now.
The medium term indicators are leaning towards the hold side at the close and the short term market direction meter shows a positive movement upwards. 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 13.25. I would advise caution in taking any position during this uncertain period although some technical indicators have starting to turn bearish.
Investing.com members' sentiments are 59 % 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.
StockChart.com 10 Year Treasury Note Yield Index ($TNX) is at 24.10. (Chart Here) Treasury Yield Curve Approaches Flattest Since 2009.
StockChart.com Overbought / Oversold Index ($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.
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. Today, 9-3-2014, XLY edged up to 69.25 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 4:00 is at 17078 up 11 or 0.06%.
The SP500 is at 2001 down 1.56 or -0.08%.
SPY is at 200.45 down 0.11 or -0.05%.
The $RUT is at 1172 down 7 or -0.62%.
NASDAQ is at 4573 down 26 or -0.56%.
NASDAQ 100 is at 4071 down 25 or -0.61%.
$VIX 'Fear Index' is at 12.36 up 0.11 or 0.90%. Neutral 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 depressed, but sideways.
WTI oil is trading between 95.78 (resistance) and 93.06 (support) today. The session bias is positive and is currently trading up at 95.38. (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 103.13 (resistance) and 100.45 (support) today. The session bias is elevated and sideways and is currently trading down at 102.42. (Chart Here)
Gold rose from 1262.10 earlier to 1272.00 and is currently trading down at 1270.60. The current intra-session trend is trending up. (Chart Here)
Dr. Copper is at 3.132 falling from 3.167 earlier. (Chart Here)
The US dollar is trading between 83.07 and 82.85 and is currently trading down at 82.86, 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
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Written by Gary