Written by Gary
Closing Market Commentary For 12-05-2014
Another session favored by traders with moderate price cycle changes. Regardless on what some stats proclaim, this market doesn't seem to know how to stop climbing.
By 4 pm the DO and SP500 made new historic highs and closing highs on moderate volume. Ten minutes before the closing bell, the was a sharp rally pushing the averages higher to what would have been a negative session.
The BTFDers saved the day and is the start of the Santa Clause Rally?
Our medium term indicators are leaning towards sell portfolio of non-performers at the close and the short-term market direction meter is bearish falling from very bearish 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 any volatility may also promote sudden reversals. The SP500 MACD has turned down, but remains above zero at 21.21. 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 67 % Bearish (falling from 70% and now rising from 33%).
StockChart.com Overbought / Oversold Index ($NYMO) is at -8.65. (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.
This $NYA200R chart below is the percentage of stocks above the 200 DMA and is always a good statistic to follow. It can depict a trend of declining equities which is always troubling, especially when it drops below 60% - 55%. Dropping below 40%-35% signals serious continuing weakness and falling averages.
StockChart.com NYSE % of stocks above 200 DMA Index ($NYA200R) is at 54.45 %. (Chart Here) 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 10 Year Treasury Note Yield Index ($TNX) is at 23.07. (Chart Here) Flattening Yield Curve Signaling Slowing Economic Growth?
Chris Ciovacco says, "As long as the consumer discretionary ETF (NYSEARCA:XLY) holds above [66.88], all things being equal, it is a good sign for stocks and the U.S. economy." This chart clearly shows that dropping below 65.00 / 62.75 (and staying there) should be of a great concern to bullish investors.
StockChart.com NYSE Composite (Liquidity) Index ($NYA) is at 10,970. (Chart Here) Markets move inverse to institutional selling. We are above the resistance (10,301) but is this a test of the next resistance (triple top) at ~11,109, watch to see if these numbers decline back down. Next stop down is 10600, 9750, then 9250, and 8500.
The DOW at 4:00 is at 17959 up 59 or 0.33%. (Historical High 17,991.19)
The SP500 is at 2075 up 3 or 0.17%. (Historical High 2,079.47)
SPY is at 208.18 up 0.34 or 0.16%.
The $RUT is at 1182 up 9 or 0.80%.
NASDAQ is at 4781 up 11 or 0.24%. (Historical High 5,132.52)
NASDAQ 100 is at 4312 down 0.36 or -0.01%.
$VIX 'Fear Index' is at 11.82 down 0.56 or -4.52%. Bearish to neutral Movement
(Follow Real Time Market Averages at end of this article)
The longer trend is up, the past months trend is trending up, the past 5 sessions have been sideways and the current bias is trending up.
WTI oil is trading between 66.86 (resistance) and 65.20 (support) today. The session bias is trending down and is currently trading down at 65.64. (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 1207.78 earlier to 1186.74 and is currently trading down at 1191.00. The current intra-session trend is trending sideways. (Chart Here)
Dr. Copper is at 2.904 falling from 2.938 earlier. (Chart Here)
The US dollar is trading between 89.48 (highest since 2009) and 88.68 and is currently trading up at 89.38, 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 next resistance/support ??? is at ~88.72 set in June, 2010.
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