Midday Market Commentary For 08-21-2013
Promptly at 2 pm the FOMC minutes were posted and the markets fell hard (~-1.00%) into what is now looked at as a bear trap. Within minutes of the fall the averages rose back up just as quickly BEFORE the FOMC minutes. The recovery was solely because of the BTFDers and one can only wonder when they are going to run out of cash? By 2:30 the averages had not only recovered from the plunge, but skyrocketed higher to close the opening gaps made this morning. Some very nice moves.
However the bulls euphoria didn’t last long as the markets once again tumbled, sinking back into the red goo. By 4 pm the averages had sunk down over -0.60% with the biggest loser being the DOW.
Lesion learned here is to wait a short while before selling as the BTFDers are going to bring the averages back up before the markets head back down. The BTFDers have been the only ones making money over the past 2 years, but like every good story there will come a day when someone is going to loose a bundle on that last throw of the dice
The really bad news is by my calculations, we have another ~20 points down (1620) on the SP500 before we reach the ‘bottom’. Yes the markets could start a recover tomorrow and move on higher, but it won’t last, count on it.
This correction has to bleed off some more, even though the markets are way oversold. Markets can remain oversold a lot longer than you can imagine and continue to dig the hole even deeper.
IF you could have guessed market direction today, literally, a fortune could have been made on the very nice swings.
The DOW at 4:00 is at 14897 down 106 or -0.70%.
The SP500 is at 1643 down 10 or -0.58%.
SPY is at 164.39 down 1.02 or -0.62%. (after market @ 164.31 and falling)
The $RUT is at 1021 down 7 or -0.68%.
NASDAQ is at 3599.79 down 13.80 or -0.38%.
NASDAQ 100 is at 3071 down 11 or 0.35%.
The longer trend is up, the past months trend is bullish, the past 5 sessions have been bearish and the current bias is negative.
WTI oil is trading between 105.35 and 103.55 today. The session bias is negative and is currently trading down at 103.95.
Brent Crude is trading between 109.23 and 110.24 today. The session bias is positive and is currently trading down at 109.81.
Gold fell from 1373.56 earlier to 1389.37 and is currently trading up at 1368.40.
Dr. Copper is at 3.316 falling from 3.331 earlier.
The US dollar is trading between 80.92 and 81.51 and is currently trading up at 81.41, the bias is currently positive.
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Written by Gary