Written by Gary
Closing Market Commentary For 12-30-2014
Slow day at Wall Street as the averages sort of melted down fractionally from the get-go and not doing much on the way down. Looking forward to next year hoping for some 'action'.
By 4 the averages were down ~0.50% and nary a BTFDer anywhere around. It is safe to sat the Santa Claus rally is over for the year.
Our medium term indicators are leaning towards sell portfolio of non-performers at the close and the session market direction meter is 0.5 % bearish. 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 flat, but remains above zero at 13.65. 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 warnings 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 60 % Bearish.
StockChart.com Overbought / Oversold Index ($NYMO) is at 37.56. (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 54.15 %. (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 ($TNX) is at 21.90. (Chart Here) Flattening Yield Curve Signaling Slowing Economic Growth?
Chris Ciovacco says, "As long as the consumer discretionary ETF (NYSEARCA:XLY) holds above [66.88], all things being equal, it is a good sign for stocks and the U.S. economy." This chart clearly shows that dropping below 65.00 / 62.75 (and staying there) should be of a great concern to bullish investors.
StockChart.com NYSE Composite (Liquidity) Index ($NYA) is at 10,934. (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 ~11,900, 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 17983 down 55 or -0.31%. (Historical High 18,103.45)
The SP500 is at 2080 down 10 or -0.49%. (Historical High 2,093.55)
SPY is at 207.64 down 1.12 or -0.54%.
The $RUT is at 1213 down 6 or -0.50%.
NASDAQ is at 4777 down 29 or -0.61%. (Historical High 5132.52)
NASDAQ 100 is at 4282 down 30 or -0.70%.
$VIX 'Fear Index' is at 15.92 up 0.86 or 5.71%. Bullish 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 net positive and the current bias is down and trading sideways.
WTI oil is trading between 54.24 (resistance) and 52.72 (support) today. The session bias is neutral, trending sideways and is currently trading down at 53.66. (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 rose from 1182.58 earlier to 1208.76 and is currently trading down at 1198.30. The current intra-session trend is elevated, trending down. (Chart Here)
Dr. Copper is at 2.853 rising from 2.821 earlier. (Chart Here)
The US dollar is trading between 90.65 (highest since 2006 and 80 to ~90 is a very substantial resistance) and 90.11 and is currently trading up at 90.28, the bias is currently trending sideways. (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 is at ~88.85 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