Written by Gary
Midday Market Commentary For 01-15-2015
There are some very pleased traders in the market today as the averages made wide swings this morning that were predictable. The volatility in the oils, gold and the U.S. Dollar has made the Grand Market Casino very interesting and also points out the manipulation going on.
By noon the overall trend was down fractionally as the candle burns at both ends. Investors had best take a step back and wait for the dust to settle.
The markets never travel in a straight line for long and 'guessing' the short term can be risky. Oil is believed to continue its fall, but that doesn't necessarily mean that it will in the short term.
One day, it's gold. Another, it's equities. Most days, it's crude. On Wednesday, it was copper. The latest big mover makes those others look like minor-league hiccups. Full Story
Our medium term indicators are leaning towards sell portfolio of non-performers at the midday and the session market direction meter is 32 % 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 down, but remains below zero at -7.28. 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 41 % Bearish.
StockChart.com Overbought / Oversold Index ($NYMO) is at -25.70. (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 47.51 %. (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.
Many indicators are showing markets leveling off or rounding indicating market softness that could lead to lower values and investor's should watch carefully. The SP500 MACD, $BPNYA, $BPSPX, $TNX and the $NYA all show rounding off the tops which in the past has lead to a downturn.
Also, the SP500 10 DMA has crossed over the 20 DMA (12-11-14) always indicating a 'correction' underway. The 50,100, 145 and 200 DMA are all going flat which is never a good omen for a continuing bull run. Watch for the 50 DMA to cross over the 100,145 and 200 DMA to indicate how deep the correction will be.
These are not 'leading' indicators as such, but depicting 'trends' in the making showing data accumulated over the past several months, but needs to be watched.
StockChart.com 10 Year Treasury Note Yield Index ($TNX) is at 17.90. (Chart Here) 10-year Treasury yield drops below 2% for first time in 7 months
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 10,569. (Chart Here) Markets move inverse to institutional selling and this NYA Index is followed by Institutional Investors. It is a very important index for investors to watch. We are above the support (10,301) but is this a test of the next resistance (triple top) at ~11,000 to 11,108, watch to see if these numbers decline back down. Next stop down is 10600, 9750, then 9250, and 8500.
The DOW at 12:15 is at 17381 down 49 or -0.28%. (Historical High 18,103.45)
The SP500 is at 2002 down 3.59 or -0.46%. (Historical High 2,093.55)
SPY is at 199.99 down 0.86 or -0.41%.
The $RUT is at 1166 down 11 or -0.93%.
NASDAQ is at 4610 down 29 or -0.63%. (Historical High 5132.52)
NASDAQ 100 is at 4122 down 23 or -0.57%.
$VIX 'Fear Index' is at 22.26 up 0.78 or 3.68%. Bearish to Neutral Movement
(Follow Real Time Market Averages at end of this article)
The longer trend is up, the past months trend is net negative, the past 5 sessions have been negative and the current bias is negative.
WTI oil is trading between 51.19 (resistance) and 47.00 (support) today. The session bias is negative and is currently trading up at 47.62. (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 1226.24 earlier to 1266.44 and is currently trading up at 1263.10. The current intra-session trend is positive. (Chart Here)
Dr. Copper is at 2.552 falling from 2.594 earlier. (Chart Here)
The US dollar is trading between 93.14 (highest since 2005 and ~92 is a very substantial resistance with 92.53 representing a triple top) and 91.54 and is currently trading down at 92.79, 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 current level (~91 / 92) is the resistance (substantial) and could be a triple top of sorts. Historical chart Here.
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