Written by Gary
Opening Market Commentary For 09-12-2014
Premarket were flat prior to the US Imported Goods dropped 0.9% and US Export Prices fell 0.5% in August, steeper than the 0.2% drop analysts anticipated. Falling less than 0.1% after the reports the markets opened down and immediately fell-0.3% and remained there sea-sawing in a very tight trading range.
By 10 am the averages were melting further down as volume was falling. I expect by this afternoon the HFT computers will elevate the averages somewhat as volume slides to anemic levels.
The medium term indicators are leaning towards the hold side at the opening and the short-term market direction meter is bearish. 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 +9.03. 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 69 % 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 ($TNX) is at 25.98. (Chart Here) Treasury Yield Curve Approaches Flattest Since 2009.
StockChart.com Overbought / Oversold Index ($NYMO) is at -23.30. (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 and it has started - which is short term bearish.
Chris Ciovacco says, "As long as the consumer discretionary ETF (NYSEARCA:XLY) holds above [66.88], all things being equal, it is a good sign for stocks and the U.S. economy." This chart clearly shows that dropping below 65.50 should be of a great concern to bullish investors. Wednesday, 9-3-2014, XLY edged up to 69.25 and was a signal that we might have another reversal as were are witnessing. Protect thyself!
Investors are currently unhappy, unenthusiastic, skittish and ready to jump ship every time it nudges against a small financial iceberg. They remain long for now unable to afford to sell and live off cash savings that have negative real rates thanks to the Feds. They feel in their guts, correctly, that a real 'correction' is coming and can't do anything about it until it is too late. Greed rules the day and investors should be very cautious.
What I fear the most in relationship to the end of the infamous QE is that the FED has no backup plan to keep the markets from correcting as they have not done so for several years. As the liquidity starts to 'evaporate' that will in-turn deteriorate the props that have held the markets up so well. Each and every 'correction' will be deeper and deeper as this money phenomenon disappears.
Watch the Fund manages to keep an eye on the volume at AmeriTrade as the best indicator to what Maw and Pop 'Sheeples' retail trading are. Some analysts believe the Federal Reserve may raise interest rates more quickly than they have currently indicated but nothing from Janet Yellen has indicated this.
These managers are are closely monitoring any signals that Ms. Yellen is going to backtrack on exiting QE and these guys will exit the markets long before the 'Sheeples' if she doesn't. Watch the the fund managers!
The DOW at 10:15 is at 17015 down 34 or -0.20%.
The SP500 is at 1992 down 6 or -0.29%.
SPY is at 199.82 down 0.49 or -0.24%.
The $RUT is at 1167 down 5 or -0.42%.
NASDAQ is at 4579 down 12 or -0.27%.
NASDAQ 100 is at 4077 down 15 or -0.37%.
$VIX 'Fear Index' is at 13.30 up 0.50 or 3.91%. Bullish to 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 negative and the current bias is down, but swinging upwards.
WTI oil is trading between 93.66 (resistance) and 92.44 (support) today. The session bias is negative and is currently trading up at 92.75. (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)
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The general consensus is that gold prices will actually fall in the next twelve months (Sept to Aug. 2015). Goldman Sachs estimates that gold will fall to $1,050 an ounce, a drop of nearly 19%.
Gold fell from 1240.58 earlier to 1231.88 and is currently trading up at 1234.50. The current intra-session trend is negative. (Chart Here)
Dr. Copper is at 3.101 rising from 3.079 earlier. (Chart Here)
The US dollar is trading between 84.56 and 84.80 and is currently trading down at 84.40, the bias is currently neutral and very volatile. (Chart Here) >>>> There is a gap below between 83.92 and 83.79, watch out below as any rise is expected to be temporary.<<<<<<
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