Written by Gary
Closing Market Commentary For 04-04-2014
Many of the major averages closed down 1.50% several over 2.40%. The small caps took the greatest hit most likely the ‘sheeples’ decided to panic and jump ship.
By 4 pm the decent had slowed and the averages were trending sideways in a exaggerated sea-saw fashion punctuated with a last minute sell-off by the HFT computers. Volume remained elevated most of the day, mostly red and the $VIX ending in the low 14’s. One might say the party is over and the hangover has begun.
Expect to see the morning premarket and opening market with a ‘pump and dump’ from the ‘not-so-nice’ market manipulators and shellacking the ‘sheeples’ once again. I know were in in for a tough market ride as one of my, not-so-informed’ neighbors announced to me yesterday that he had just bought GOOG at 585 because he had heard it was going to go higher. I asked him when that was, but he wasn’t sure – oh boy!
“Stock-Picker’s Market” is the term we hear again and again, but, as Cliff Asness blasted “I think they mean, “We will have to pick stocks now because the market isn’t making us money the easy way.“
As the following chart shows, the picture for most people’s portfolios is a very different one from the index all-time highs that are tritted out day after day as indicative of the wealth that the Fed has created.
As Asness concluded, perhaps talking-heads should more honestly explain, “Our market-timing forecasts are mostly useless most of the time, but right now, they are completely useless,” as the average member of the S&P 500 is 6.5% off its highs (as the index pushes ahead).
The jobs number expectation had been falling for a few days into the print this morning and despite the desperate efforts of every status-quo-hugging TV talking-head’s Goldilocks scenario, it was not a good report . . .
it missed low expectations and it seems the market is realizing (having been told the bar is very high for an un-taper) that the Fed will not rescue it any time soon.
GDP expectations are also tumbling and thus the hope-driven hyper-growth stocks have been monkey-hammered. This is the worst swing for the Nasdaq since Dec 2011 (with Russell, Dow, and Nasdaq -1% YTD).
Momos and Biotechs were blamed but this was broad-based selling as JPY carry was unwound in a hurry.
Gold rallied above $1300 (+8.1% YTD) as bond yield ripped lower for 5Y’s biggest daily drop in 10 weeks (short-end -4bps on the week). VIX pushed back above 14 (but it was clear derisking exposure – as opposed to hedging positions – was the order of the day).
The short term indicators are STILL 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, 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. I would advise caution in taking any position during this volatile transition period although Barchart.com shows a 16 % buy. (Remember this has been negative for weeks.)
@ReformedBroker: Look, no one knows what’s going to happen here – the important thing is that you panic.
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The DOW at 4:00 is at 16526 down 160 or -0.96%.
The SP500 is at 1865 down 24 or -1.25%.
SPY is at 186.56 down 2.23 or -1.18%.
The $RUT is at 1153 down 28 or -2.35%.
NASDAQ is at 4128 down 110 or -2.60%.
NASDAQ 100 is at 3539 down 98 or -2.70%.
$VIX ‘Fear Index’ is at 13.96 up 0.59 or 4.41%. Neutral Movement
(Follow Real Time Market Averages at end of this article)
The longer trend is up, the past months trend is positive, the past 5 sessions have been positive and the current bias is negative.
WTI oil is trading between 100.30 and 101.60 today. The session bias is mixed and mostly sideways and is currently trading down at 101.11.
Brent Crude is trading between 105.66 and 107.02 today. The session bias is sideways and is currently trading down at 106.60.
Gold rose from 1284.52 earlier to 1306.96 and is currently trading up at 1303.70. The current intra-session trend is sideways.
Dr. Copper is at 3.022 falling from 3.060 earlier.
The US dollar is trading between 80.48 and 80.76 and is currently trading up at 80.57, the bias is currently mixed and volatile.
Real Time Market Numbers
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Written by Gary