Market Commentary: Markets Fade to Close Out Year

December 31st, 2014
in Gary's blogging, market close, syndication

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Closing Market Commentary For 12-31-2014

Updated 6:16 pm EST (New York time)

Gary has started New Year's eve early. This report is brought to you in cooperation with our content sharing partner

The weakness anticipated at mid-day materialized as the market faded into the close with losses in the Utilities, Telecommunications and Financials sectors leading shares lower.

Follow up:


The best performers of the session on the Dow Jones Industrial Average were Home Depot Inc (NYSE:HD), which rose 0.67% or 0.70 points to trade at 104.97 at the close. Meanwhile, International Business Machines (NYSE:IBM) added 0.24% or 0.39 points to end at 160.44 and Walt Disney Company (NYSE:DIS) was down 0.54% or 0.51 points to 94.19 in late trade.

The worst performers of the session were Cisco Systems Inc (NASDAQ:CSCO), which fell 1.80% or 0.51 points to trade at 27.85 at the close. UnitedHealth Group Incorporated (NYSE:UNH) declined 1.71% or 1.76 points to end at 101.09 and Merck & Company Inc (NYSE:MRK) was down 1.49% or 0.86 points to 56.79.

The top performers on the S&P 500 were QEP Resources Inc (NYSE:QEP) which rose 2.64% to 20.22, Mallinckrodt (NYSE:MNK) which was up 1.85% to settle at 99.03 and Tractor Supply Company (NASDAQ:TSCO) which gained 1.68% to close at 78.80.
The worst performers were Diamond Offshore Drilling Inc (NYSE:DO) which was down 3.60% to 36.71 in late trade, FirstEnergy Corporation (NYSE:FE) which lost 2.96% to settle at 38.99 and Noble Corporation PLC (NYSE:NE) which was down 2.76% to 16.57 at the close.

The top performers on the NASDAQ Composite were Nephrogenex (NASDAQ:NRX) which rose 187.10% to 13.35, Methes Energies International Ltd (NASDAQ:MEIL) which was up 34.65% to settle at 1.360 and State Investors Bancorp Inc (NASDAQ:SIBC) which gained 34.37% to close at 20.72.

The worst performers were Neuroderm Ltd (NASDAQ:NDRM) which was down 22.60% to 14.04 in late trade, Cache Inc (NASDAQ:CACH) which lost 18.18% to settle at 0.18 and BG Medicine Inc (NASDAQ:BGMD) which was down 15.37% to 0.44 at the close.

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 11.85. 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. members' sentiments are 60 % Bearish.

Investors Intelligence sets the breath at 54.9 % bullish with the status at Bear Confirmed. (Chart Here ) I expect a market reversal at or before ~25.0 should the markets start to descend. Overbought / Oversold Index ($NYMO) is at 2.94, down sharply from Tuesday. (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 $NYA200R chart below is the percentage of stocks above the 200 DMA and is always a good statistic to follow. It can depict a trend of declining equities which is always troubling, especially when it drops below 60% - 55%. Dropping below 40%-35% signals serious continuing weakness and falling averages. NYSE % of stocks above 200 DMA Index ($NYA200R) is at 53.67 %. (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. NYSE Bullish Percent Index ($BPNYA) is at 59.88. (Chart Here) Next stop down is ~57, then ~44, below that is where we will most likely see the markets crash. S&P 500 Bullish Percent Index ($BPSPX) is at 75.80. (Chart Here) In support zone and rising. ~62, ~57, ~45 at which the markets are in a full-blown correction. 10 Year Treasury Note Yield Index ($TNX) is at 21.70. (Chart Here) Flattening Yield Curve Signaling Slowing Economic Growth? Consumer Discretionary ETF (XLY) is at 72.15. (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 65.00 / 62.75 (and staying there) should be of a great concern to bullish investors. NYSE Composite (Liquidity) Index ($NYA) is at 10,839 (down 0.86%). (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.

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The DOW at 4:00 is at 17823 down 160 or -0.89%. (Historical High 18,103.45)

The SP500 is at 2059 down 21 or -1.03%. (Historical High 2,093.55)

SPY is at 205.54 down 2.06 or -0.99%.

The $RUT is at 1205 down 8 or -0.69%.

NASDAQ is at 4736 down 41 or -0.87%. (Historical High 5132.52)

NASDAQ 100 is at 4236 down 46 or -1.08%.

How the Popular 'VIX' Gauge Works

$VIX 'Fear Index' is at 19.20 up 3.28 or 20.6%. Bearish Movementx

(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.

Gundlach: Rates not going anywhere; oil headed lower

Everything You Need To Know About The Geopolitics Surrounding Crude Oil

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 53.74. (Chart Here)

Brent Crude is trading between 58.19 (resistance) and 56.76 (support) today. The session bias is neutral, trending sideways and is currently trading down at 57.47. (Chart Here)x

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 traded down all day from just above and below 1200 and is currently trading down at 1183.20. The current intra-session trend is elevated, trending down. (Chart Here)

Can Dr. Copper Heal Thyself

Dr. Copper is at 2.841 down from 2.87 earlier. (Chart Here)

The Consequences Of A Strengthening U.S. Dollar

The US dollar traded up all day from 90.20 (highest since 2006 and 80 to ~90 is a very substantial resistance)and is currently trading up at 90.64, 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


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