Written by Gary
Opening Market Commentary For 12-05-2013
Back from Micky’s Land and late to work – possibly a Freudian slip. Premarkets were quiet, slightly up signaling a quiet day ahead, but we know how fast that can change.
All markets opened in the red (-0.10) and slowly melted up to mixed and flat by 10 am. Volume is moderate and mostly green as the averages start sliding sideways waiting for Mr. Market to decide which way to go.
The short term indicators are leaning heavily towards the buy side at the morning, but I would advise caution in taking a position because of the Fed’s cryptic utterances in hinting when the taper will begin and by how much. I would also take chart and other technical indicators with a grain of salt for the time being and watch what the Fed does WHEN it actually does something.
The longer 6 month outlook remains 40-60 sell until we can see what the Fed is actually going to do, simple as that. If we get some Fed tapering in December the markets will certainly react in a negative fashion, how much of course depends on much bond buying takes place. 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.
Members of the FOMC believe the US economy has shown signs of improvement, but they have assured short-term interest rates would remain low for quite some time to come. Alpari Market Analyst, Craig Erlam, said: “Many members of the Fed now appear eager to start winding down its asset purchases and are looking for ways to do it that will create the least disruption in the financial markets, such as setting simple thresholds for reductions, or even more simply, providing a timetable for tapering that is not data dependent.”
ADVFN reported, “The rally in question has been built on the back of the Fed’s promise of a stimulatory environment. If any catalyst points to the Fed giving up its accommodative stance, there is a danger of a pullback and near term support for the index lies around the 15,965, 15,890 and 15,804 levels.”
Personally, I think it could go a lot lower, much lower.
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 15880 down 10 or -0.11%.
The SP500 is at 1789 down 3 or -0.19%.
SPY is at 179.34 down 0.41 or -0.21%.
The $RUT is at 1122 up 1 or 0.11%.
NASDAQ is at 4036 down 2 or -0.05%.
NASDAQ 100 is at 3478 down 5 or -0.15%.
The longer trend is up, the past months trend is bullish, the past 5 sessions have been negative and the current bias is mixed.
WTI oil is trading between 97.71 and 97.14 today. The session bias is sideways and is currently trading down at 97.56.
Brent Crude is trading between 112.23 and 111.18 today. The session bias is mixed and is currently trading up at 11153.
Gold fell from 1239.52 earlier to 1220.53 and is currently trading up at 1222.80.
Dr. Copper is at 3.224 falling from 3.240 earlier.
The US dollar is trading between 80.84 and 80.33 and is currently trading up at 80.42, the bias is currently negative.
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Written by Gary