Written by Gary
Closing Market Commentary For 09-25-2014
The SP500 and NASDAQ closed BELOW it 50 DMA, the DOW and $NDX closed at its 50 DMA and the $RUT is so far below its 200 DMA that it is looking for the bottom.
By 4 pm the afternoon averages traded sideways in a very tight zone and long investors are worried. This could have been a bear trap. Are we headed for further downside tomorrow?
There is a 75% chance the markets will be green tomorrow and then continue the softness next week.
Actually the $RUT has NOT breached its support lows set on 8-1 at 1107, but if it goes below that and closes below 1107, we do have a new ball game here and a 10% decent becomes a reality. I suspect the $RUT will consolidate, close higher tomorrow before testing the current level again. The BTFDers are looking forward to more downside.
The medium term indicators are leaning towards the hold side at the close and the short-term market direction meter is bearish. We remain mostly, at best, neutral and conservatively holding. The important DMA's, volume and a host of other studies have not turned significantly and that is not enough for me to start shorting, but now I am getting very concerned. The SP500 MACD has turned down, but remains above zero at +2.79. I would advise caution in taking any position during this uncertain period although some technical indicators have starting to turn bearish.
Investing.com members' sentiments are 69 % Bearish and it seems to be a good sign for being bullish. The 'Sheeples' always seem to get it wrong.
StockChart.com NYSE Bullish Percent Index ($BPNYA) is at 60.39. (Chart Here) Below support zone and apparently going further down. Next stop ~57 and then ~44, below that is where we see the markets crash.
StockChart.com 10 Year Treasury Note Yield Index ($TNX) is at 25.11. (Chart Here) Treasury Yield Curve Approaches Flattest Since 2009.
StockChart.com Overbought / Oversold Index ($NYMO) is at -52.30. (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.
The DOW at 4:00 is at 16946 down 264 or -1.54%.
The SP500 is at 1966 down 32 or -1.62%.
SPY is at 196.58 down 3 or -1.61%.
The $RUT is at 1110 down 18 or -1.60%.
NASDAQ is at 4467 down 88 or -1.94%.
NASDAQ 100 is at 4008 down 86 or -2.11%.
$VIX 'Fear Index' is at 15.64 up 2.37 or 17.86%. 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 negative, trading sideways.
WTI oil is trading between 93.53 (resistance) and 92.06 (support) today. The session bias is descending, volatile and is currently trading down at 93.03. (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 rose from 1207.40 earlier to 1225.08 and is currently trading down at 1221.30. The current intra-session trend is positive. (Chart Here)
Dr. Copper is at 3.035 falling from 3.063 earlier. (Chart Here)
The US dollar is trading between 85.60 and 85.16 and is currently trading down at 85.34, the bias is currently neutral. (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