Written by Gary
Opening Market Commentary For 11-20-2013
Premarkets were up +0.20% this morning on so-so financial news and dovish remarks made by Ben Bernanke last night.
Markets did open up +0.30% but began the familiar sea-sawing off its highs slowly melting down on falling volume as investors settle in until the FOMC minutes are released later this afternoon.
Later today the FMOC minutes will release details of its October meeting that may or may not shed light on future thoughts on tapering. It will most likely increase volatility as investors tried to examine or decipher the committees underlying sentiment on maintaining its stimulus program.
The problem facing traders is that the trading range, which has been so narrow during the trading day lately, that way too much money has to be put on the table just to get back meager gains. Again, guessing where the market is going to be tomorrow or next week, at this time anyway, can be a foolish and costly endeavor.
Home Sales Plunge At Fastest Rate In 16 Months
It seems, despite the Fed’s efforts to unscramble the treasury complex’s eggs, that the rate shock of a taper/no-taper decision has become sticky in the housing market.
With the fast money exiting, existing home sales missed expectations for the 4th month in a row – dropping to the lowest annualized number since June (very much against the trend in recent years).
This is the biggest month-over-month drop in existing home sales since June 2012 but, of course, NAR has an excuse… “low inventory is holding back sales.” So, in other words, they could sell loads more houses if only there were more available for sale (or prices were lower…)…
The short term indicators are leaning towards the sell side at the opening, 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. I would also take chart and other technical indicators with a grain of salt for the time being and watch what the Fed does.
The longer 6 month outlook remains 40-60 sell until we can see what the Fed is going to do, simple as that. If we get Fed tapering in December, unlikely now, 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 (shooting star) to verify a top along with heavy volume.
The DOW at 10:15 is at 15976 up 11 or 0.07%.
The SP500 is at 1791 up 3 or 0.18%.
SPY is at 179.44 up 0.43 or 0.23%.
The $RUT is at 1104 up 2 or 0.23%.
NASDAQ is at 3941 up 9 or 0.24%.
NASDAQ 100 is at 3387 up 9 or 0.28%.
The longer trend is up, the past months trend is bullish, the past 5 sessions have been positive and the current bias is flat and sideways.
WTI oil is trading between 94.48 and 93.42 today. The session bias is negative and is currently trading down at 93.50.
Brent Crude is trading between 107.24 and 106.52 today. The session bias is now sideways with a slight positive slant and is currently trading up at 106.92.
Gold crashed from 1273.60 earlier to 1255.65 and is currently trading up at 1257.70.
Here’s why copper has lost its indicator role
Dr. Copper is at 3.168 rising from 3.152 earlier.
The US dollar is trading between 80.77 and 80.56 and is currently trading down at 80.59, the bias is currently negative.
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Written by Gary
