Written by Gary

Opening Market Commentary For 04-09-2014

Premarkets were trading up at +0.20% and rose another +0.05% when the US Mortgage Application report fell to 1.6% down from 1.2% this morning.

Markets gaped upwards on the opening sending the NASDAQ to +0.55%, the DOW to +0.44% and the SP500 to +0.30% on low volume. It first appears investors are not buying this bullish move by the 15 minute mark the large caps were melting off the morning opening highs in a steady fashion. By 10 am the averages had reversed direction once again, but the trend was slightly negative.

Read at DailyFX, “I feel like this market’s on crazy pills; this among chief reasons. RT @SaraEisen: Greek 10 year yield falls below 6% first time in 4 years.”

For reasons that are purely profit, but unethical, the crooked manipulators are pumping this market upwards – be ready for a sudden reversal, it is coming.

By Steve Goldstein

WASHINGTON (MarketWatch) — Markets risk “disappointment” in an environment of rising interest rates unless equity valuations become better supported by rising earnings, capital investment, and aggregate demand, the International Monetary Fund said Wednesday as part of its global financial stability report.

The IMF said U.S. equity prices are in line with the long-term trend on price-to-equity ratio but looks stretched on the Shiller P/E ratio, which takes into account 10 years of earnings.

The report more broadly said financial stability has improved in advanced economies, as the IMF continued to express concern on the impact the Federal Reserve’s less-accommodative policies will have on emerging markets.

I would advise column readers to watch the NASDAQ carefully.

A Technical Look at the Nasdaq Composite
Apr 08, 2014 Floyd Flannigan

Since most of the hysteria of the last few days seems focused on the Nasdaq Composite, I would expect the other indexes to follow the Comp if the overall situation continues to deteriorate.

If one were to view the stock market as predictable, one might say, based on a daily chart, that this is a textbook head-and-shoulders in the making, with a picture-perfect up-trending neckline plus a very nice horizontal neckline (~4000).

So, now a retracement up to the mid-Fibonacci zones is in order, and then a retest of the neckline(s).
More…

The short term indicators are leaning towards the hold side at the opening. The all important signs of reversal, up or down, have not been observed so we are mostly, at best, neutral and conservatively holding. The important DMA’s, 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 40 % sell. (Remember this has been negative for weeks.)

Last nights season earnings kick-off by Alcoa reporting was not a very good start. If you think the Alcoa earnings report was good, well look at this – look at it VERY carefully.

Alcoa’s Non-GAAP Earnings, Or “Loss” On A GAAP Basis, Report Explained In Two Charts

While Q1 GAAP EPS was indeed a disaster, printing at $(0.16), yes, a loss, one naturally has to add back hundreds of millions of “one time, non-recurring” charges to get the non-GAAP number which was, you guessed it, a tiny beat of the consensus Q1 EPS print of $0.05, coming at $0.09.

All this happened as the company’s revenues not only tumbled from $5.83 billion a year ago to just $5.454 billion this quarter (down from $5.585 billion in Q4), but also missed expectations of $5.55 billion.

The longer 6 month outlook is now 35-65 sell and will remain bearish until we can see what the effects are in the Fed’s ‘Tapering’ game plan and Russia’s annexing game playing. Again, I would also take chart and other technical indicators with a lessor degree of reliability for the time being and watch what the Janet Yellen’s Fed does over the next couple of months. The margin debt is very high and has been setting historic highs and as of Monday, 4-7-2014, it stands at $466 billion.

Several more notes of negativity is that the margin debt for stock purchases is at an all time high and investors are worried about issues directly related to the Fed’s tapering. They are considering this factor along with the Argentine Peso, South African Rand and Japan. And of course, China’s defaulting businesses are dropping like flies. And now the Second Chinese Bond Company Defaults, First High Yield Bond Issuer. And now Another Chinese High Yield Bond Issuer Declares Bankruptcy.

The real story behind the current weakness is the US weak housing, layoffs and poor employment data, inventory reductions and soft economic outlook including a mediocre sales outlook.

Many pundits have stated that we may have seen the top – but I wouldn’t count it as long as the Fed continues to hand out ‘Market Viagra’, even if it is being reduced somewhat! I would like to see a blowout candle (shooting star) to verify a top along with heavy volume to signify a market top.

The Best Stock Market Indicator Update says the market is tradable. (Not in my corner.) The OEXA200R ended the week at 90%, up from 86% last weekend.

Of the three secondary indicators:

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  RSI is POSITIVE (above 50).

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  MACD is POSITIVE (black line above red).

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  Slow STO is POSITIVE (black line above red).

My feeling is that we’re entering the final euphoria phase of the five-year stock market bull, and I’ll be watching warily for major resistance points in the coming months. One in particular will be when the Nasdaq reaches 5000, the same top as in year 2000, maybe by this June or July. I’m very surprised at how large this bubble has grown, fueled by the Fed’s single-minded determination to support Wall Street. (. . . and I agree )

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  Read More . . .

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The DOW at 10:15 is at 16279 up 24 or 0.14%.

The SP500 is at 1853 up 1 or 0.06%.

SPY is at 185.20 up 1 or 0.07%.

The $RUT is at 1145 up 1 or 0.09%.

NASDAQ is at 4124 up 11 or 0.26%.

NASDAQ 100 is at 3546 up 8 or 0.22%.

$VIX ‘Fear Index’ is at 14.90 up 0.05 or 0.34%. Neutral Movement

(Follow Real Time Market Averages at end of this article)

The longer trend is up, the past months trend is sideways, the past 5 sessions have been mostly down and the current bias is elevated, but negative trending.

How Oil Really Gets Priced

WTI oil is trading between 102.05 and 102.86 today. The session bias is elevated, but sideways and is currently trading down at 102.62.

Brent Crude is trading between 107.13 and 108.07 today. The session bias is elevated, but sideways and is currently trading up at 107.78.

Gold fell from 1314.28 earlier to 1301.29 and is currently trading up at 1304.40. The current intra-session trend is depressed and sideways.

Analysts forecast a corrosive year for copper prices

Dr. Copper is at 3.012 falling from 3.057 earlier.

The US dollar is trading between 79.95 and 79.78 and is currently trading up at 79.81, the bias is currently sideways.

Real Time Market Numbers

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Written by Gary