Written by Gary
Closing Market Commentary For 09-24-2014
The averages continued to melt upwards during the afternoon session and pushing the DOW into triple digits. The small caps, NASDAQ was over +one percent while the $RUT just couldn't get the steam to play with the other averages and that is worrisome.
By 4 pm the volume remained low to anemic and looking tired. Several things could happen tomorrow.
If the $NYMO continues to be oversold we are sure to see a rise in the equities even though the very short term indicators indicate bearishness. On the other hand we might see another so-so day before descending, which is what I think the averages need to do.
I would love to see another 4% dip, recovery and proceed back up. That is what the medium indicators are showing. The problem with this analysis, is that this market has not done anything it was supposed to do for the last 5 years and I really don't expect it change now.
The medium term indicators are leaning towards the hold side at the close and the short-term market direction meter is heavily bullish. We remain mostly, at best, neutral and conservatively holding. The important DMA's, volume and a host of other studies have not turned significantly and that is not enough for me to start shorting, but now I am getting very concerned. The SP500 MACD has turned down, but remains above zero at +5.60. I would advise caution in taking any position during this uncertain period although some technical indicators have starting to turn bearish.
Investing.com members' sentiments are 72 % Bearish and it seems to be a good sign for being bullish. The 'Sheeples' always seem to get it wrong.
StockChart.com 10 Year Treasury Note Yield Index ($TNX) is at 25.69. (Chart Here) Treasury Yield Curve Approaches Flattest Since 2009.
StockChart.com Overbought / Oversold Index ($NYMO) is at -71.65. (Chart Here) But anything below -30 / -40 is a concern of going deeper. Oversold conditions on the NYSE McClellan Oscillator usually bounce back at anything over -50 and reverse after reaching +40 oversold.
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.
The DOW at 4:00 is at 17210 up 154 or 0.90%.
The SP500 is at 1998 up 16 or 0.78%.
SPY is at 199.49 up 1.55 or 0.78%.
The $RUT is at 1128 up 10 or 0.86%.
NASDAQ is at 4555 up 47 or 1.03%.
NASDAQ 100 is at 4094 up 43 or 1.053%.
$VIX 'Fear Index' is at 13.24 down 1.69 or -11.32%. Bullish 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 positive.
WTI oil is trading between 93.27 (resistance) and 91.14 (support) today. The session bias is positive, very volatile and is currently trading down at 92.94. (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 1226.69 earlier to 1216.63 and is currently trading down at 1217.60. The current intra-session trend is negative. (Chart Here)
Dr. Copper is at 3.055 rising from 3.023 earlier. (Chart Here)
The US dollar is trading between 85.22 and 84.70 and is currently trading up at 85.15, the bias is currently sideways and quiet. (Chart Here) Resistance made in Aug., 2013 has been broken.
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