Market Commentary: SP500 Makes New High On Low Volume, Trading Is Sideways

September 3rd, 2014
in Gary's blogging, market open

Written by

Opening Market Commentary For 09-03-2014

Premarkets were up +0.40% this morning and opened the same way on low volume. The SP500 set a new historic high (2009.28) and like yesterday, started melting lower.

By 10 am the the DOW was up 75 points and dropping and the small caps were flat and in the red - all on low volume which suggests manipulation of sorts. The bear may be taking a nap as trading slides sideways, but I would be cautious.

Follow up:

I would view this continual climbing on low volume as suspect and pay close attention to $NYMO for market near term reversals.

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 up, but remains above zero at 13.36. 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 ($BPNYA) is at 65392. (Chart Here) Very close to resistance now and rising. S&P 500 Bullish Percent Index ($BPSPX) is at 76.20. (Chart Here) Remains below support, now resistance. 10 Year Treasury Note Yield Index ($TNX) is at 24.44. (Chart Here) Treasury Yield Curve Approaches Flattest Since 2009. Overbought / Oversold Index ($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 69.11. (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!

Why You Should Not Be Comfortable With The Level Of The Stock Markets


  • The Dow Jones has set a new record above 17,000.

  • The NFP came out with a stronger than expected number of 288,000 new jobs for June.

  • Wage growth remains low, well below the level the Fed would like to see.

The U.S. economic recovery is not on sure footing yet. There are foundation issues, especially in the housing market and with wages. The Fed should take into account these problems before raising rates. The Fed is in the middle of tapering its massive bond buying program, hoping to end it by end of October 2014. They have continued to keep short term rates near zero, amid speculation they will raise them soon. The Fed is correct in keeping them as is. It is still too early to raise rates. While 200K new jobs a month is a good thing, a print of 300K would point to a stronger economic recovery.

There are reasons to be concerned. While there is a feeling of euphoria over the Dow Jones hitting 17,000 and closing above it, do not expect it to stay at this level. There is no real economic growth supporting it.

The DOW at 10:15 is at 17140 up 72 or 0.42%.

The SP500 is at 2007 up 5 or 0.26%.

SPY is at 201.18 up 0.56 or 0.28%.

The $RUT is at 1183 up 3 or 0.29%.

NASDAQ is at 4600 up 2 or 0.04%.

NASDAQ 100 is at 4095 down 1 or -0.03%.

$VIX 'Fear Index' is at 12.04 down 0.21 or -1.71%. Bullish 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 elevated, but trending down.

How Oil Really Gets Priced

WTI oil is trading between 94.41 (resistance) and 93.06 (support) today. The session bias is positive and is currently trading up at 94.37. (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 positive and is currently trading up at 102.27. (Chart Here)

Why Gold Will Rise When The Dollar Falls

Gold rose from 1262.10 earlier to 1272.00 and is currently trading down at 1265.70. The current intra-session trend is negative. (Chart Here)

Dr. Copper is at 3.137 falling from 3.167 earlier. (Chart Here)

The US dollar is trading between 83.07 and 82.86 and is currently trading down at 82.89, the bias is currently negative 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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