Written by Gary
Opening Market Commentary For 11-11-2013
Premarkets were flat and quiet leading up to the opening bell. With no US financial reports this morning and investors soured by lack of guidance from Mr. Market plus the Fed’s lack of candor, it would appear we are going to see another sideways trading today.
Markets opened flat and mixed, mostly red, on low volume and by the 15 minute mark the markets remained very quiet and non-committal as to direction. By 10 the markets squeaked into the green by virtue of the HFT computers pushing the DOW up 22 points.
I don’t think I would call this market ‘solid’ by any stretch of the imagination and the US economic numbers are only slightly suggesting the US is on some sort of recovery path. In my opinion this apple cart could EASILY be overturned with the smallest of ‘Black Swans’ and that is precisely what savvy investors are worried about.
Upbeat U.S. economic figures shored up global markets Monday even though there are growing expectations that the Federal Reserve could begin to reduce its monetary stimulus next month.
Shares in the Philippines fell after a devastating typhoon. Last week, a round of U.S. economic data, including Friday’s better-than-expected nonfarm payrolls report, ratcheted up expectations that the Fed will soon start “tapering” its $85 billion worth of asset purchases.
Some analysts think that the positive response in markets may indicate that the fear of the tapering _ dominant for much of this year _ has reduced and investors are now more willing to view strong economic news as a reason to buy stocks.
After all, a growing U.S. economy will help corporate profits. “Equities are not selling off as they have previously,” said Craig Erlam, market analyst at Alpari. “Maybe the ‘good news is bad news’ scenario is finally becoming a thing of the past.”
The short term indicators are leaning towards the sell side by 10 am, but because of the Fed’s reluctance to give any hints of when the taper will begin, investors really do not know what to do. Having said that, I would take chart and other technical indicators with a grain of salt. “Technically’ speaking, Friday should have been a recovery day with maybe a +0.25% gain and not the almost 2% rise the $RUT displayed and that doesn’t make a lot of sense.
The longer 6 month outlook remains 40-60 sell in my opinion while the Barchart is again calling a 100% sell on the long term and 88% on the medium term. I can’t be that bearish in light of what the Fed may or may not do.
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. Also, many pundits have stated that we may have seen the top – but I wouldn’t count it as long as the Fed continues to hand out ‘Market Viagra’! I would like to see a blowout candle to verify a top or even something over a 2 percent market rise would be a good signal.
The DOW at 10:00 is at 15782 up 20 or 0.13%.
The SP500 is at 1772 up 2 or 0.08%.
SPY is at 177.36 up 0.09 or 0.06%.
The $RUT is at 1100 up 0.20 or 0.02%.
NASDAQ is at 3921 up 1 or 0.04%.
NASDAQ 100 is at 3366 up 1 or 0.01%.
The longer trend is up, the past 6months trend is bullish, the past 10 sessions have been sideways and the current bias is negative.
WTI oil is trading between 94.89 and 94.12 today. The session bias is positive and is currently trading up at 94.58.
Brent Crude is trading between 105.12 and 105.74 today. The session bias is sideways and is currently trading up at 105.69.
Gold rose from 1278.53 earlier to 1286.99 and is currently trading down at 1281.60.
Dr. Copper is at 3.252 falling from 3.268 earlier.
The US dollar is trading between 81.41 and 81.16 and is currently trading down at 81.20, the bias is currently sieways.
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Written by Gary