Written by Gary
Midday Market Commentary For 10-13-2014
Markets are relatively quiet in spite of low to moderate volume. Support lines have been severally tested and rebounded as the averages sea-saw near the unchanged line all morning.
By noon the averages were fractionally trending upwards and may end the session right where they are now. Crossroad time!
My question is, 'are we near the BTFD time?'
Our medium term indicators are leaning towards the hold to lighten portfolio of non-performers at the midday and the short-term market direction meter is fractionally bullish. We remain mostly, at best, slightly negative and conservatively bullish. The important DMA's, volume and a host of other studies have are now turning and that is still not enough for me to start shorting, but now I am getting very concerned the current downtrend will get more aggressive. The SP500 MACD has turned down, but remains below zero at -17.20. I would advise caution in taking any position during this uncertain period except to return your 'dogs' to the pound. Having some cash on hand now is not a bad strategy.
Investing.com members' sentiments are 38 % Bearish (falling from 70%) and it seems to be a good sign for being bearish. The 'Sheeples' always seem to get it wrong.
StockChart.com NYSE Bullish Percent Index ($BPNYA) is at 44.49. (Chart Here) Below support zone and apparently going further down. Next stop was ~57 and now it is ~44, below that is where we will most likely see the markets crash.
StockChart.com 10 Year Treasury Note Yield Index ($TNX) is at 22.86. (Chart Here) Treasury Yield Curve Approaches Flattest Since 2009.
StockChart.com Overbought / Oversold Index ($NYMO) is at -61.58. (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 65.00 (and staying there) should be of a great concern to bullish investors.
This $NYA200R chart below is the percentage of stocks above the 200 DMA and is always a good statistic to follow. It can depict a trend of declining equities which is always troubling, especially when it drops below 60% - 55%. Dropping below 40%-35% signals serious continuing weakness and falling averages.
Today it represents the lowest levels seen since the beginning of the October, 2011 rally. Eric Parnell says, ' If nothing else, given that relatively fewer stocks are trading above their 200-day moving average at a time when the market is just off of its all-time highs suggests that an increasingly narrowing group of stocks is driving the rally at this stage, which does not bode well for the future sustainability of the uptrend." It also strongly suggests there has been a 'stealth bear market' underway in recent months.
StockChart.com NYSE % of stocks above 200 DMA Index ($NYA200R) is at 33.64 %. (Chart Here) Unless this downward trend reverses itself soon, we are going to see further downside. The next support is ~37.00 and ~25.00 below that.
The DOW at 12:00 is at 16511 down 33 or -0.20%.
The SP500 is at 1899 down 6 or -0.34%.
SPY is at 189.95 down 0.61or -0.32%.
The $RUT is at 1059 up 6 or 0.56%.
NASDAQ is at 4270 down 6 or -0.15%.
NASDAQ 100 is at 3864 down 8 or -0.20%.
$VIX 'Fear Index' is at 21.47 up 0.26 or 1.22%. Bearish Movement
(Follow Real Time Market Averages at end of this article)
The longer trend is up, the past months trend is negative, the past 5 sessions have been negative and the current bias is negative.
Saudi Arabia has reportedly been telling oil-market investors and analysts that it is ready to accept oil prices below $90 per barrel, and even as low as $80, for up to a year or two. If true, it would represent a major change in policy for Riyadh, which may be looking to slow the expansion of rivals such as the U.S. Oil was -1.45% at $84.57 at the time of writing.
WTI oil is trading between 85.25 (resistance) and 84.07 (support) today. The session bias is neutral, quiet and is currently trading up at 84.83. (Chart Here)
- 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 fell from 1237.96 earlier to 1225.32 and is currently trading down at 1230.10. The current intra-session trend is neutral and quiet. (Chart Here)
Dr. Copper is at 3.037 falling from 3.047 earlier. (Chart Here)
The US dollar is trading between 58.82 and 85.54 and is currently trading down at 85.63, the bias is currently neutral and quiet. (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
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Written by Gary