Written by Gary
Closing Market Commentary For 03-26-2014
The first dip today, DailyFX reporting, that equity sell off got blamed on options. Some insto bought 15K SPX May 1995 puts. Triggering about 3bln delta to sell. The second one later in the afternoon is the result of tumbling fears in China and additional aggressiveness of Russia.
By 4 pm the averages had fallen deeply into the red on elevated volume, but still remaining in the channel started February 28, 2014. Now the ill winds of possible market collapse are becoming scarier. The SP500 daily chart below depicts the current channel and the possibility of a slow-motion break to the downside.
There is more gut-feeling in some investors that this market could go south in a heartbeat AND without any reason. Personally, it might be wise to strengthen your cash reserves as the markets are soft looking and any correction could be a good buy. The NASDAQ closed BELOW a key support at 4182 and that signals a red opening tomorrow.
I do see a huge correction coming, but it doesn’t lend itself well to current conditions. Trade accordingly.
The short term indicators are leaning towards the hold side at the close but I do not know if the INDICATORS are very helpful right now. 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, 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. The MACD has turned down slightly, but remains above zero. Everything else at this point is just a guess. I would advise caution in taking any position during this volatile transition period although Barchart.com shows a 0 % hold.
If you would like to get advanced buy/sell tweets, sign-up in the column to the right of this post by clicking on the ‘Follow‘ button. Write me with suggestions and I promise not to bite.
The DOW at 4:00 is at 16269 down 99 or -0.60%.
The SP500 is at 1853 down 13 or -0.70%.
SPY is at 184.78 down 1.34 or -0.72%.
The $RUT is at 1155 down 23 or 1.92%.
NASDAQ is at 4174 down 61 or -1.43%.
NASDAQ 100 is at 3583 down 47 or -1.29%.
$VIX ‘Fear Index’ is at 13.81 down 0.21 or -1.50%. Neutral Movement
The longer trend is up, the past months trend is positive, the past 5 sessions have been sideways and the current bias is negative.
WTI oil is trading between 99.03 and 100.44 today. The session bias is positive and is currently trading up at 100.27. (Closing above the magic number 100)
Brent Crude is trading between 106.49 and 107.32 today. The session bias is sideways with a positive slant and is currently trading down at 106.94.
Gold fell from 1316.88 earlier to 1299.42 and is currently trading down at 1303.90. The current intra-session trend is negative.
Dr. Copper is at 2.965 falling from 3.012 earlier.
The US dollar is trading between 80.00 and 80.29 and is currently trading up at 80.17, the bias is currently sideways.
To contact me with questions, comments or constructive criticism is always encouraged and appreciated:
Written by Gary