Closing Market Commentary: Averages Closed Up While Trading Sideways Entire Session, Investors Uneasy

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Closing Market Commentary For 05 Mar, 2015

The session ended up being slow, but not the almost grinding to a halt slow I was somewhat expecting. That could still come as investors are definitely being cautious with so many unknowns threatening to upset Mr. Markets apple cart.

By 4 pm there was a minor sell-off with moderate volume which is not unusual, but the short-term indicators are swinging to the bearish side and investors should pursue caution.

Follow up:

 

MarketWatch thinks today's low volume action was a choppy session, just wait until next week.

 

NEW YORK (MarketWatch) -- U.S. stocks ended Thursday's choppy session with modest gains. Stocks dipped into negative territory at midday, but recovered to close slightly higher, as investors displayed their skittishness ahead of Friday's closely watched jobs report. Investors reflected on the announcement that the European Central Bank will kick off a trillion-dollar plan to purchase government bonds and other debt on Monday, as well as economic reports, including weekly jobless claims.

 

Minyanville on the other hand agrees that the averages remained in a holding pattern today.

The S&P 500 finished up 0.1% at 2101.04, marking the 14th straight day without a 1% day-to-day move. Prior to this stretch, the S&P made 1% moves in 14 out of 29 trading days in 2015.

The European Central Bank made no changes to its interest rate policy, as expected. At a press conference, Mario Draghi announced that the ECB would begin its quantitative easing program on Monday. The ECB will likely purchase €60 billion in assets per month until September 2016, and the program could go on beyond that should disinflationary trends continue.

The big story tomorrow is obviously the February NFP report, which will be delivered at 8:30 a.m.

According to Bloomberg, economists are expecting a 235,000 increase in nonfarm payrolls, a 5.6% unemployment rate, and a 0.2% month-over-month increase in hourly earnings.

Our medium term indicators are leaning towards Hold portfolio of non-performers and the session market direction meter (for day traders) is 26 % Bearish and rising. 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 down, but remains above zero at 15.57.

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'.

Our medium term indicators are leaning towards Hold portfolio of non-performers and the session market direction meter (for day traders) is 26 % Bearish and rising. 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 down, but remains above zero at 15.57.

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'.

As of now, I do see some leading indicators that are warning of a 'long-term' reversal within six months. I believe one is most likely to occur later in 2015, but any market fluctuations we see now are more of a internal market rectification than a bear market. If you are not worried, then at least be cautious.

Investing.com members' sentiments are 72 % Bearish and steady.

CNN's Fear & Greed Index is 66 and falling. 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.

Investors Intelligence sets the breath at 61.2 % bullish with the status at Bull Confirmed. (Chart Here )

StockChart.com Overbought / Oversold Index ($NYMO) is at -14.33. (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 58.66 %. (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.

StockChart.com NYSE Bullish Percent Index ($BPNYA) is at 65.11. (Chart Here) Next stop down is ~57, then ~44, below that is where we will most likely see the markets crash.

StockChart.com S&P 500 Bullish Percent Index ($BPSPX) is at 75.00. (Chart Here) In support zone and rising. ~62, ~57, ~45 at which the markets are in a full-blown correction.

StockChart.com 10 Year Treasury Note Yield Index ($TNX) is at 21.12. (Chart Here) The all time low is 13.94 (11-2012).

StockChart.com Consumer Discretionary ETF (XLY) is at 76.33. (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.

StockChart.com NYSE Composite (Liquidity) Index ($NYA) is at 11,019. (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.

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 18136 up 39 or 0.21%. (Historical High 18,288.63)

The SP500 is at 2101 up 2.51 or 0.12%. (Historical High 2,119.59)

SPY is at 210.51 up 0.23 or 0.11%.

The $RUT is at 1234 up 3.58 or 0.29%.

Don't Invest In The Russell 2000

NASDAQ is at 4983 up 16 or 0.32%. (Historical High 5132.52)

NASDAQ 100 is at 4452 up 7 or 0.15%.

How the Popular 'VIX' Gauge Works

$VIX 'Fear Index' is at 14.04 down 0.19 or -1.34%. 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 negative and the current bias is elevated and sideways.

WTI oil is trading between 52.38 (resistance) and 50.63 (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, trending down and is currently trading up at 50.95. (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.

Brent Crude is trading between 61.54 (resistance) and 60.11 (support) today. The support currently is ~58.60, next ~58.13 and the next resistance is ~62.00. The session bias is volatile, neutral and is currently trading down at 60.67. (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 rose from 1197.28 earlier to 1195.99 and is currently trading up at 1198.10. The current intra-session trend is volatile, neutral but trending down. (Chart Here)

Dr. Copper in Need of Some Medicine?

Dr. Copper is at 2.653 falling from 2.679 earlier. (Chart Here)

The Consequences Of A Strengthening U.S. Dollar

Will 2015 be the Year of the Greenback?

The US dollar is trading between 96.61 and 95.86 (highest levels since 2003 and ~93.69 is a very substantial support). U.S. dollar is currently trading up at 96.41, the bias is currently positive and closed above its resistance. (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. 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

If you would like to get advanced buy/sell tweets, sign-up in the column to the right of this post by clicking on the 'Follow' button. Write me with suggestions and I promise not to bite.

Real Time Market Numbers

Leading Stock Quotes powered by Investing.com

To contact me with questions, comments or constructive criticism is always encouraged and appreciated:

gary@econintersect.com

Written by Gary

 









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