Written by Gary
Opening Market Commentary For 11-06-2013
Premarket numbers were in the +0.40% up from yesterday’s close and unaffected by the drop in the MBA Mortgage Applications falling from 6.4% to -7.0% this month.
Markets gaped up at the opening again leaving speculation about the averages falling to close this gap in this session just like it did yesterday when the markets gaped down. There is more negative pressure on the markets currently than there is normally and the prospect of the averages declining today are better than usual.
By 10 am the averages melted up to previous historical highs and flattened out for the moment. US Leading Indicators came in unchanged from the previous report of +0.07% resulting in an sideways market on low to moderate volume.
I usually have a negative comment about market volume and the lack of participation from seasoned investors and traders on a daily basis. Not surprisingly the uninformed ‘sheeples’ are the one group of investors that are increasingly jumping onto this market train, just like they did in 2008, and that is scary. Lower volume allows skewed market gains resulting from HFT algo computers which in turn gives false hope of a good investment to the ignorant or grossly uninformed ‘sheeple’.
Time and time again, we have key stock indices lure investors into bets they shouldn’t be taking.
. . . one common thing happened: the stock market moved much higher on a lack of fundamentals to the point that irrationality took over. In all cases, the theme of stock prices will rise even further because “this time is different” prevailed.
. . . this is hands-down the biggest bear trap I have ever seen.
But here’s what’s really bothering me about the stock market…something I’m not seeing many analysts write about. I’m talking about the significant decline in trading volume on the markets.
Since March of 2009, when the current rally started, volume on key stock indices has been falling hard.
The short term indicators are leaning moderately towards the sell side this morning, but because of the Fed’s reluctance to give any hints of when the taper will begin, I would take most indicators with a grain of salt. The longer outlook remains 40-60 sell.
If we get Fed tapering in December the markets will certainly react in a negative fashion. If the tapering begins in March 2014, like many believe it will, the markets are going to price that in by declining sooner. I am expecting weak to negative markets for the foreseeable future. Maybe we have seen the top – but I wouldn’t count it as long as the Fed continues to hand out ‘Market Viagra’!
The DOW at 10:15 is at 15728 up 111 or 0.70%.
The SP500 is at 1773 up 10 or 0.56%.
SPY is at 177.36 up 1 or 0.63%.
The $RUT is at 1107 up 3 or 029%.
NASDAQ is at 3950 up 10 or 0.26%.
NASDAQ 100 is at 3398 up 10 or 0.28%.
The longer trend is up, the past months trend is bullish, the past 5 sessions have been sideways and the current bias is up, but sideways.
WTI oil is trading between 93.76 and 94.54 today. The session bias is positive and is currently trading up at 94.45.
Brent Crude is trading between 106.39 and 105.52 today. The session bias is negative and is currently trading up at 105.69.
Gold rose from 1309.94 earlier to 1321.84 and is currently trading sideways at 1318.40.
Dr. Copper is at 3.267 rising from 3.250 earlier.
The US dollar is trading between 80.69 and 80.45 and is currently trading down at 80.51, the bias is currently negative.
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Written by Gary