Market Commentary: Markets Slide Unable To Pierce Resistance

October 6th, 2014
in Gary's blogging, midday post

Written by

Midday Market Commentary For 10-06-2014

The SP500 and the DOW never went above their supports. For the 500 it was the 50 DMA and the DOW, NASDAQ, $NDX and $$RUT it was the down-trend line that needed to be penetrated and wasn't.

By noon the chart slopes were sliding quickly on moderate volume as some bearish investors are throwing in the towel as the SP500 closes in on the 100 DMA.

Follow up:

The medium term indicators are leaning towards the hold side at the midday and the short-term market direction meter is neutral, trending to the bearish side. 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 flat, but remains below zero at -6.71. I would advise caution in taking any position during this uncertain period although some technical indicators have starting to turn bearish. members' sentiments are 59 % Bearish and it seems to be a good sign for being bullish. The 'Sheeples' always seem to get it wrong.

Investors Intelligence sets the breath at 49.5 % bullish with the status at Bear Confirmed. (Chart Here ) NYSE Bullish Percent Index ($BPNYA) is at 53.23. (Chart Here) Below support zone and apparently going further down. Next stop was ~57 and now it is ~44, below that is where we will most likely see the markets crash. S&P 500 Bullish Percent Index ($BPSPX) is at 65.20. (Chart Here) In support zone and falling - doesn't look good. ~62, ~57, ~45 at which the markets are in a full-blown correction. 10 Year Treasury Note Yield Index ($TNX) is at 24.25. (Chart Here) Treasury Yield Curve Approaches Flattest Since 2009. Overbought / Oversold Index ($NYMO) is at -27.12. (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. Consumer Discretionary ETF (XLY) is at 66.60. (Chart Here)

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.

This $NYA200R chart below is the percentage of stocks above the 200 DMA and is always a good statistic to follow. It can depict a trend of declining equities which is always troubling, especially when it drops below 60% - 55%. Dropping below 40%-35% signals serious continuing weakness and falling averages.

Today it represents the lowest levels seen since the beginning of the October, 2011 rally. Eric Parnell says, ' If nothing else, given that relatively fewer stocks are trading above their 200-day moving average at a time when the market is just off of its all-time highs suggests that an increasingly narrowing group of stocks is driving the rally at this stage, which does not bode well for the future sustainability of the uptrend." It also strongly suggests there has been a 'stealth bear market' underway in recent months. NYSE % of stocks above 200 DMA Index ($NYA200R) is at 45.31 %. (Chart Here) Unless this downward trend reverses itself soon, we are going to see further downside

The DOW at 12:00 is at 16982 down 27 or -0.16%.

The SP500 is at 1963 down 4 or -0.23%.

SPY is at 195.12 down 0.42 or -0.20%.

The $RUT is at 1097 down 8 or -0.72%.

NASDAQ is at 4456 down 19 or -0.42%.

NASDAQ 100 is at 4016 down 11 or -0.27%.

How the Popular 'VIX' Gauge Works

$VIX 'Fear Index' is at 15.41 up 0.81 or 5.57%. Bearish Movement

(Follow Real Time Market Averages at end of this article)

The longer trend is up, the past months trend is net neutral, the past 5 sessions have been down and the current bias is negative.

How Oil Really Gets Priced

WTI oil is trading between 90.40 (resistance) and 88.79 (support) today. The session bias is negative and is currently trading down at 89.48. (Chart Here)

Brent Crude is trading between 93.11 (resistance) and 91.25 (support) today. The session bias is negative and is currently trading up at 91.72. (Chart Here)

Why Gold Will Rise When The Dollar Falls

- and -

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 1187.75 earlier to 1204.05 and is currently trading up at 1202.80. The current intra-session trend is positive. (Chart Here)

Currency Corruption Weighs on Copper

Dr. Copper is at 3.036 rising from 2.991 earlier. (Chart Here)

The US dollar is trading between 86.77 and 86.24 and is currently trading up at 86.28, the bias is currently negative. (Chart Here) Resistance made in Aug., 2013 ($85.00) 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

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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