Market Commentary: FOMC Minutes Not Received Well And Markets Descend

Written by Gary

Closing Market Commentary For 11-20-2013

Heaviest red volume since November 7 as the averages slid down after the FOMC minutes were announced. Exactly at 2 pm the markets started plunging when it was announced the Fed ‘might’ start winding down in the coming months.

By 4 pm the averages were all posting red numbers on moderate to heavy volume. Investors were obviously not pleased and many decided to jump ship.

It remains to be seen if this negative market is a trend or just a transitory mood swing.

Whether the FOMC minutes were good or bad for the dollar, Mr. Market and investors alike decided it wasn’t very good by falling after the meeting minutes which indicated that Federal Reserve officials might begin winding down bond purchases in the “coming months.” The US dollar saw this as good and climbed 16 cents while the DOW eased down -0.30% after the release of the minutes.

“It sounds like tapering is in the cards” next month, especially if data released in early December shows that hiring accelerated in November, said Thomas Roth, executive director in the U.S. government bond trading group at Mitsubishi UFJ Securities (USA) Inc in New York.

The short term indicators are leaning towards the sell side at the closing, but I would advise caution in taking a position because of the Fed’s reluctance to give any hints of when the taper will begin, maybe today. I would also take chart and other technical indicators with a grain of salt for the time being and watch what the Fed does, not says.

The longer 6 month outlook remains 40-60 sell until we can see what the Fed is ‘really’ going to do, simple as that. If we get Fed tapering in December, back on the table again, the markets will certainly react in a negative fashion as they did this morning with Bullard’s remarks. 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 (shooting star) to verify a top along with heavy volume.

The DOW at 4:00 is at 15901 down 66 or -0.41%.

The SP500 is at 1781 down 6.50 or -0.36%.

SPY is at 178.53 down 0.56 or -0.31%.

The $RUT is at 1100 down 1.59 or -0.14%.

NASDAQ is at 3921 down 10 or -0.26%.

NASDAQ 100 is at 3367 down 11 or -0.32%.

The longer trend is up, the past months trend is bullish, the past 5 sessions have been mixed and the current bias is up, but moving sideways.

How Oil Really Gets Priced

WTI oil is trading between 94.48 and 93.25 today. The session bias is negative and is currently trading down at 93.71.

Brent Crude is trading between 108.34 and 106.52 today. The session bias is now sideways after a sudden rise and is currently trading down at 107.83.

Gold crashed from 1273.60 earlier to 1240.17 and is currently trading up at 1244.80.

Here’s why copper has lost its indicator role

Dr. Copper is at 3.148 falling from 3.175 earlier.

The US dollar is trading between 80.77 and 81.17 and is currently trading down at 81.08, the bias is currently sideways.

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Written by Gary