Closing Market Commentary For 11-12-2014
The large caps briefly moved fractionally into the green late this afternoon and then sea-sawed back and forth at the unchanged line. The small caps continued climbing from the morning lows and posted gains that exceeded 0.5% in the case of $RUT.
By 4 pm the volume increased slightly, as usual, but still very low indicating more weakness tomorrow.
More than likely we have seen the market move to highs that won't be repeated for a few sessions. Many analysts are looking for a 'consolidation' period before making any kind of move - up or down. The recent cease fire breach in the Ukraine are problematic issues and could cause negative European market problems that could spill over to the US.
Our medium term indicators are leaning towards sell portfolio of non-performers at the close and the short-term market direction meter is Bearish having moved from neutral this morning. We remain mostly conservatively bullish, neutral in other words. Right now now I am getting very concerned any downtrend could get very aggressive in the short-term and volatility may also promote sudden reversals. The SP500 MACD has turned up, but remains above zero at 24.89. I would advise caution in taking any position during this uncertain period and I hope you have returned your 'dogs' to the pound.
Having some cash on hand now is not a bad strategy as market changes are happening everyday. As of now, I do not see any leading indicators that are warning of a 'long-term' reversal in the near-term. There may be one later in 2015, but any market fluctuations we see now are more of a internal market rectification than a bear market.
Investing.com members' sentiments are 65 % Bearish (falling from 70% and now rising from 33%).
StockChart.com Overbought / Oversold Index ($NYMO) is at 43.27. (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. (Now were are high enough to descend again - watch out!)
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 57.77 %. (Chart Here) The downside decent has reversed, but will it continue to rise above 50%? The next support is ~37.00, ~25.00 and ~15.00 below that. December, 2011 was the last time we saw numbers in the 20's.
StockChart.com NYSE Bullish Percent Index ($BPNYA) is at 57.02. (Chart Here) Below support zone but rising. Next stop was ~57, then ~44, below that is where we will most likely see the markets crash. We are seriously below 44 and need a reversal pronto as it looks like there is nothing to stop the fall until 25 and taking the markets with it.
StockChart.com 10 Year Treasury Note Yield Index ($TNX) is at 23.59. (Chart Here) Treasury Yield Curve Approaches Flattest Since 2009.
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 / 62.75 (and staying there) should be of a great concern to bullish investors.
StockChart.com NYSE Composite (Liquidity) Index ($NYA) is at 10,886. (Chart Here) We are above the resistance (10,301) but is this a test of the next resistance at ~10600/900, watch to see if these numbers decline back down. If they don't then there an excellent possibility for the markets going higher now that we have topped 10900. Next stop down is 10600, 9750, then 9250, and 8500.
The DOW at 4:00 is at 17612 down 3 or -0.02%. (Historical High 17,638.21)
The SP500 is at 2038 down 1 or -0.07%. (Historical High 2,041.28)
SPY is at 204.13 down 0.22 or -0.11%.
The $RUT is at 1186 up 7 or 0.55%.
NASDAQ is at 4675 up 15 or 0.31%.
NASDAQ 100 is at 4195 up 8 or 0.20%.
$VIX 'Fear Index' is at 13.04 up 0.07 or 0.54%. 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 positive and the current bias is mixed.
WTI oil is trading between 78.01 (resistance) and 76.67 (support) today. The session bias is trending down and is currently trading up at 76.80. (Chart Here)
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 1169.47 earlier to 1156.66 and is currently trading down at 1159.30. The current intra-session trend is negative. (Chart Here)
Dr. Copper is at 3.028 falling from 3.043 earlier. (Chart Here)
The US dollar is trading between 87.98 and 87.46 and is currently trading down at 87.89, the bias is currently positive. (Chart Here) Resistance made in Aug., 2013 (~85.00) has been broken and now is support. This support has gotten much stronger since August, 2014 and isn't likely to fall easily.
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