Written by Gary
Closing Market Commentary For 03-20-2014
Same story as the noon-time report, just a different time. The averages remained elevated and traded sideways on low volume for the afternoon session.
By 4 pm the volume was still on the low side and not much happened as far as the BTFDers are concerned. The averages moved within rock throwing distance of the historical high closing, but never made any real attempt to challenge it. This bull market really looks tired at this point and I would continue to be VERY cautious of sudden reversals.
Keep your eye on China as it is almost on fire. The smoke you see is from the evolving issues in the Ukraine and is masking BIG problems in China.
Following the default of 2 more corporations last night, Hang Seng’s index of China Enterprises plunged to 8-month lows and officially entered bear market territory.
Overnight angst in the Chinese currency markets (which saw the Yuan trade back to 1-year lows) has sparked broad commodity weakness (as CCFD unwinds en masse) with copper giving back most of yesterday’s major short squeeze gains back.
Chinese corporate bond prices also tumbled to one-month lows.
The short term indicators are leaning towards the hold side at the close. 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, but that could happen in a heartbeat. I would advise caution in taking any position during this volatile transition period although Barchart.com shows a 72 % sell.
I still believe that Mr. Market is STILL not through playing with us and even newer historical highs are a distinct possibility beyond what we have seen, mainly because the amount of bond buying the Fed still does on a monthly basis. For those who are hell-bent bears, this article, 5 Reasons Your Simple Bear Market Plans Could Backfire, should be required reading.
If the Russian President Putin stops at annexing Crimea, the markets may alleviate current weakness and the bull run will continue as some bullish pundits seem to indicate. It is also possible that this is simply a pause where Putin will take the slack time to consider his next global conquest. One of the many issues investors face is that a Reuters article suggests that tensions in Eastern Europe/Central Asia aren’t going away as Russian posturing persists in spite of Russian Propaganda. Yet investors don’t seem to mind today.
Investors are also worried about issues directly related to the Fed’s tapering and are considering this factor along with the Argentine Peso, South African Rand and the Yen. And of course, China’s defaulting businesses are dropping like flies.
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The DOW at 4:00 is at 16331 up 109 or 0.67%.
The SP500 is at 1872 up 11 or 0.60%.
SPY is at 187.11 up 0.45 or 0.24%.
The $RUT is at 1199 up 3.31 or 0.28%.
NASDAQ is at 4319 up 12 or 0.27%.
NASDAQ 100 is at 3694 up 11 or 0.31%.
$VIX ‘Fear Index’ is at 14.53 down 0.59 or -0.26%. Bullish Movement
The longer trend is up, the past months trend is positive, the past 5 sessions have been mixed and the current bias is elevated, but sideways.
WTI oil is trading between 98.10 and 99.44 today. The session bias is negative and is currently trading down at 98.56.
Brent Crude is trading between 106.71 and 105.44 today. The session bias is mixed and is currently trading down at 106.19.
Gold rose from 1321.11.02 earlier to 1322.55 and is currently trading down at 1327.50. The current intra-session trend is negative.
Dr. Copper is at 2.931 falling from 2.995 earlier.
The US dollar is trading between 80.05 and 80.50 and is currently trading down at 80.36, the bias is currently sideways.
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Written by Gary