Opening Market Commentary For 08-09-2013
Premarkets were down indicating a gap down for the cash crowd as the ‘fear index’ ($VIX) remains below 12.
Markets opened down as expected but that turned out to be a bear trap as the markets quickly turned around (what else would you expect in this casino market) where the SP500 moved up near yesterday’s highs and the small caps jumped a tad above.
By 10 the markets looked uncertain as the game was changing again.
The 10 am ‘not so good’ reporting of the Wholesale Inventories woke up the slumbering summer session and sent the averages in the other direction – down and on moderate volume. The markets are obviously weak and any further gains are uncertain – for today anyway. Our indicators still show 60% buy and 30% sell, but we are to close to a breakout to be dipping our toes into the murky market waters at this time.
We continue to post warnings as usual, but the caveat is that warnings like the one below and the current Hindenburg Oman have been posted before, 2 years ago in fact. The markets continue to move upwards because of Dr. Ben’s free ice cream.
It is well-known that as part of the S&P500’s ascent to new records, investor margin debt has also surged to all time highs, surpassing for the past three months previous records set during both prior, the dot com and the housing, stock market bubbles.
And as more attention has shifted to the topic of speculator leverage once more, inquiries into the correlation between bets upon bets and stock performance are popping up once more, in this case in a study by Deutsche Bank titled “Red Flag! – The curious case of NYSE margin debt.”
Of particular note here is a historical comparison of margin-debt warnings that have recurred throughout history but especially just before major stock bubble crashes, such as in the period 1999/2000, 2007/2008 and of course today, which have time and again been ignored.
Here is what was said then, what is being said now, and what is ignored always. READ MORE. . .
The DOW at 10:15 is at 15447 down 51 or -0.33%.
The SP500 is at 1693 down 4 or -0.26%.
SPY is at 169.50 down 0.27 or -0.16%.
The $RUT is at 1049 down 0.74 or -0.07%.
NASDAQ is at 3667 down 2 or -0.06%.
NASDAQ 100 is at 3127 down 3 or -0.09%.
The longer trend is up, the past months trend is bullish, the past 5 sessions have been sideways and the current bias is bearish.
WTI oil is trading between 103.61 and 105.44 today. The session bias is bullish and is currently trading up at 105.10.
Brent crude is trading between 106.61 and 107.70 today. The session bias is neutral and is currently trading down at 107.36.
Gold fell from 1316.11 earlier to 1304.51 and is currently trading down at 1310.90.
Dr. Copper is at 3.310 rose from 3.242 earlier.
The US dollar is trading between 81.20 and 80.97 and is currently trading down at 81.10, the bias is currently negative.
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Written by Gary