Written by Gary
Closing Market Commentary For 03 Mar, 2015
The averages lumbered along this afternoon mostly on low volume and trading sideways. One would think after yesterday's rousing climb to new historic highs were see a bit more enthusiasm from the 'sheeples', I mean there is no end to this bull run according to some.
By 4 pm I was glad to be heading out of the office. I mean I wasn't falling asleep or anything like that, but today was pretty boring. It is days like this that catch you off guard when all of a sudden the market wakes up and you have no plan to act upon.
Today would have been one of those days where I wouldn't have known to cut bait or fish.
I wonder what the 'Black Swan' will be IF the markets will EVER turn around?
According to Minyanville:
Stocks Hung Out to Dry Following NASDAQ 5000 Party
Wednesday will offer plenty of news to wade through, including a host of economic data. MBA Mortgage Applications, ADP Employment, Markit PMI, ISM Services, and Crude Oil Inventories will be reported in the morning.
Traders will be closely watching the ADP and ISM reports for signs of economic strength, which could put the rate hike discussion front and center.
Canada will announce its interest rate decision.
In earnings, retailers Abercrombie & Fitch (ANF), American Eagle (AEO), and PetSmart (PETM) will report earnings before the open.
Our medium term indicators are leaning towards Hold portfolio of non-performers and the session market direction meter (for day traders) is 24 % bullish. We remain mostly conservatively bullish, but with a bearish slant. I am very concerned any downtrend could get very aggressive in the short-term and any volatility may also promote sudden reversals that will only please the day traders. The SP500 MACD has turned flat, but remains above zero at 18.46.
Having some cash on hand now is not a bad strategy as negative market changes are happening everyday. Many investors are starting to take in some profits from 'high-fliers' as a precaution and to build a better cash base for the 'dips'.
Investing.com members' sentiments are 75 % Bearish.
CNN's Fear & Greed Index is 70 and slipping. Above 50 = greed, below 50 = fear. (At 'Greed') (Chart Here) The number of stocks hitting 52-week highs exceeds the number hitting lows and is at the upper end of its range, indicating extreme greed.
StockChart.com Overbought / Oversold Index ($NYMO) is at +14.46. (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 60.68 %. (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.
These are not 'leading' indicators as such, but depicting 'trends' in the making showing data accumulated over the past several months and needs to be watched.
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 11,045. (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 support down is 10600, 9750, then 9250, and 8500.
It is still possible that Mr. Market is not through playing with the averages and even newer historical highs are a possibility. Historically, accordingly to Eric Parnell, "major bull markets have almost never reached their final peak in a sideways grinding pattern (which we are in). Instead, they have almost always peaked with flourish including one final crescendo toward a new all-time high before finally rolling over and succumbing to the forces of the new bear market".
The longer 6 month outlook is now 45-55 sell and will remain somewhat bearish until we can see what the effects are from the oil decline, the Euro collision with Greece and the U.S. Fed possibly triggering a deflationary slide. The markets are at a crossroad of sorts, indecision of which way to go, with a bias to the downside.
I am going to change the way we report the market action by having a 9 am premarket news report followed later with what is happening at irregular times. I am going to rely on tweeting alerts to notify you on important changes in the markets. If you want to be on my front line for 'significant' events that could effect your trading and want to recieve Trader Alert 'Tweets' click here:
The DOW at 4:00 is at 18203 down 85 or -0.47%. (Historical High 18,288.63)
The SP500 is at 2108 down 10 or -0.45%. (Historical High 2,119.59)
SPY is at 210.96 down 0.87 or -0.41%.
The $RUT is at 1235 down 8 or -0.63%.
NASDAQ is at 4980 down 28 or -0.56%. (Historical High 5132.52)
NASDAQ 100 is at 4459 down 24 or -0.54%.
$VIX 'Fear Index' is at 13.86 up 0.82 or 6.29%. Bullish to neutral Movement
(Follow Real Time Market Averages at end of this article)
The longer trend is up, the past months trend is positive and sideways, the past 5 sessions have been positive and the current bias is depressed and sideways.
WTI oil is trading between 50.75 (resistance) and 49.45 (support) today. The support currently is ~49.00, then ~45.06 and the next resistance is ~54.40+. The Iranians say they are comfortable with $25 and I'll bet the Saudi's will do everything possible to make it painful for them, meaning much lower prices to come. The session bias is volatile, neutral and is currently trading down at 50.30. (Chart Here)
Some believe Saudi Arabia is ready to call 'uncle' and cut oil production which would raise prices. But that would be in the face of NOT achieving their goals of financially hurting Iran or Russia. Kevin Kerr, president of Kerr Trading International is positive that "the Saudi's [will] announce a production cut" is a bit premature.
I am betting that the emergency meeting was more about what can they do to make oil fall further and faster, but that is just my opinion of course.
Markets Open Fractionally
Brent Crude is trading between 61.79 (resistance) and 59.83 (support) today. The support currently is ~58.60, next ~58.13 and the next resistance is ~62.00. The session bias is trending up and is currently trading down at 61.02. (Chart Here)
Citi reduced its annual forecast for Brent crude for the second time in 2015. Prices in the $45-$55 range are unsustainable and will trigger "disinvestment from oil" and a fourth-quarter rebound to $75 a barrel, according to the report. "Prices this year will likely average $54 a barrel".
The general consensus is that gold prices will actually fall in the next twelve months (Sept. 2014 to Aug. 2015). Goldman Sachs estimates that gold will fall to $1,050 an ounce, a drop of nearly 19%.
Gold fell from 1214.36 earlier to 1201.21 and is currently trading up at 1203.20. The current intra-session trend is down and sideways. (Chart Here)
Dr. Copper is at 2.654 falling from 2.690 earlier. (Chart Here)
The US dollar is trading between 95.59 and 95.14 (highest levels since 2003 and ~93.69 is a very substantial support). U.S. dollar is currently trading up at 95.44, the bias is currently neutral and trending up. (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 level of ~93 is the current support and is substantial. The ~95 area appears to be a minor resistance for those interested. 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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Real Time Market Numbers
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Written by Gary