Market Commentary: Markets Open Down, Melt Up Into Green

Written by Gary

Opening Market Commentary For 10-28-2013

Premarkets were flat all morning while the US Manufacturing came in at -0.01%. The US dollar jumped to 79.44 but the oils, gold and copper remained relatively within a tight zone. Brent is trending upwards with gold remaining in a tighter range.

At 10 the US Pending Home Sales printed the largest miss since May of 2010 coming in at -5.6%. Markets reaction was muted, in the red, flat and lackluster.

The SP500 marketed a new high by a few cents but is being hampered going higher by strong resistance. The DOW is lagging behind as usual and the small caps are in line with the rest of the averages on low to moderate volume.

Short term indicators have moved out of the 50-50 zone to 40-60 sell and the longer term indicators have moved back into the 50-50 non-committal arena. Most analysts are leaning towards more upside for the market in light of recent rumors on continuing QE at even larger than the current 85 billion per month.

Now is not the time to take on additional positions with so much market indecision coming into play.

Manufacturing Production Disappoints As Utilization Rises To 5-Year High

Industrial Production data for September rose by 0.6%, beating expectations by the most in 11 months as pre-government shutdown data was ‘helped’ by a revision lower in August (from 0.4% to 0.2% growth).

Manufacturing production rose only 0.1% (missing expectations of +0.3%) as gains in car makers’ output was offset by declines in computers, furniture, and appliances.

Capacity Utilization surged to 5 year highs with its biggest beat of expectations since Dec 2010. All-in-all, a strangely mixed bag of great and dismal data once again…

Good enough ‘trend’ to warrant ‘taper’? who knows… but we posit the cyclical trend remains and the government shutdown likely renegs some of this better-than-expected data when we see it.

The DOW at 10:15 is at 15574 up 7 or 0.05%.

The SP500 is at 1763 up 3 or 0.17%.

SPY is at 176.23 up 0.28 or 0.16%.

The $RUT is at 1119 up 1 or 0.11%.

NASDAQ is at 3946 up 3 or 0.08%.

NASDAQ 100 is at 3386 up 2 or 0.05%.

The longer trend is up, the past months trend is bullish, the past 5 sessions have been positive and the current bias is positive.

How Oil Really Gets Priced

WTI oil is trading between 98.26 and 97.40 today. The session bias is mixed and is currently trading up at 97.99.

Brent Crude is trading between 107.00 and 108.42 today. The session bias is positive and is currently trading up at 108.33.

Gold rose from 1346.30 earlier to 1356.57 and is currently trading up at 1355.00.

Here’s why copper has lost its indicator role

Dr. Copper is at 3.271 falling from 3.285 earlier.

The US dollar is trading between 79.44 and 79.21 and is currently trading down at 79.38, the bias is currently down.

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Written by Gary