Written by Gary
Closing Market Commentary For 03-13-2014
The SP500 slipped into the support buffer zone I would call very dangerous territory between 1847 and 1839 at 3:20 this afternoon. Should the 500 drop below 1839 we can look towards continued depressed markets as investors sort out thoughts on risky Chinese financial problems, Russia possibly invading Ukraine and emerging markets issues.
By 4 pm the averages were reporting deep losses, but the SP500 had climbed almost out of the buffer zone but on low volume suggesting further losses in tomorrow’s session.
The DOW is well onto its way to its support zone beginning at 16,100 as are other major averages. Tomorrow might be a ‘recovery’ day, but expect further losses next week. Unfortunately the crystal ball is a bit cloudy and we will just have to wait for Mr. Market.
Copper’s China-credit-contraction-driven crash continues as the metal drops to fresh 5-year lows today (on par with Lehman and the US downgrade collapses).
Japanese stocks are down over 1000 points from their post-Putin highs. Russian stocks are plunging, Germany’s (and Swiss) bonds are surging (as is gold) and European equity and credit markets are in free-fall. But apart from that…
Finally we saw the world’s angst spill into Yen-carry trades (USDJPY was spanked today – almost biggest drop in 6 months). US equities plunged tick-for-tick with USDJPY (S&P’s biggest drop in 6 weeks and red for 2014);
Treasury yields were crushed 9-10bps from intraday highs (biggest drop in 2 months); credit spreads banged wider; gold jumped to six-month highs; and EUR weakness (post-Draghi) ramped the USD back near unchanged on the week.
VIX was a one-way street higher all day (biggest low-to-high run in 6 weeks) to 6-week highs.
The short term indicators are leaning towards the hold side at the closing. The all important signs of reversal, up or down, have not been observed so we are mostly, at best, neutral and conservatively holding. The 50DMA, MACD, volume and a host of other studies have not turned, only a 6% correction (and recovery) and that is not enough for me to start shorting. I would advise caution in taking any position during this volatile transition period although Barchart.com shows a 16% buy. Evidently, they are expecting the BTFDers to jump in and save the day.
The Best Stock Market Indicator Update says the market is untradable. The OEXA200R ended the week at 82%, unchanged from last weekend.
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The DOW at 4:00 is at 16109 down 231 or -1.41%.
The SP500 is at 1846 down 22 or –1.17%.
SPY is at 185.20 down 2.10 or -1.12%.
The $RUT is at 1177 down 15 or -1.23%.
NASDAQ is at 4260 down 63 or -1.46%.
NASDAQ 100 is at 3651 down 56 or -1.50%.
$VIX ‘Fear Index’ is at 16.22 up 1.75 or 12.09%. Bearish Movement
The longer trend is up, the past months trend is positive, the past 5 sessions have been mixed and the current bias is negative.
WTI oil is trading between 98.60 and 97.67 today. The session bias is positive and is currently trading up at 98.27.
Brent Crude is trading between 107.79 and 106.95 today. The session bias is negative and is currently trading up at 106.96.
Gold fell from 1375.39 earlier to 1365.03 and is currently trading down at 1371.40. The current intra-session trend is positive.
Dr. Copper is at 2.921 falling from 2.976 earlier.
The US dollar is trading between 79.81 and 79.37 and is currently trading down at 79.75, the bias is currently positive.
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Written by Gary