Written by Gary
Midday Market Commentary For 12-06-2013
Morning excitement has fallen off like the volume has. Small caps have regained lost morning numbers and now along with the rest of the averages, they are trading sideways at the elevated levels made this morning.
By noon the markets were all in the green with volume falling and the $VIS still hovering around 13.94.
For the traders, short term indicators are leaning towards the hold side at today’s midday, but I would advise caution in taking any 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 (17th. -18th. meeting) 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.
The DOW at 12:15 is at 15970 up 148 or 0.94%.
The SP500 is at 1802 up 17 or 0.94%.
SPY is at 180.67 up 1.73 or 0.97%.
The $RUT is at 1134 up 12 or 1.05%.
NASDAQ is at 4065 up 32 or 0.80%.
NASDAQ 100 is at 3506 up 28 or 0.80%.
The longer trend is up, the past months trend is bullish, the past 5 sessions have been negative and the current bias is up but trading sideways.
WTI oil is trading between 97.15 and 97.47 today (excluding the big swings prior to the opening). The session bias is neutral and is currently trading up at 97.47.
Brent Crude is trading between 110.95 and 111.68 today (excluding the big swings prior to the opening). The session bias is neutral and is currently trading up at 111.27.
Gold rose from 1224.72 earlier to 1233.46 and is currently trading down at 1229.90. (excluding the big swings prior to the opening)
Dr. Copper is at 3.246 rising from 3.217 earlier.
The US dollar is trading between 80.40 and 80.28 (excluding the big swings prior to the opening) and is currently trading up at 80.35, the bias is currently neutral.
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Written by Gary