Market Commentary: Markets Open Lower On Moderate Volume

Written by Gary

Opening Market Commentary For 06-11-2014

Premarkets were -0.40% down this morning and the markets opened the same way. By the 15 minute mark the averages were melting back up from the opening lows while the DOW was lagging behind.

By 10 am the large caps were definitely having a problem with strength as the bears were clawing at any BTFDers that came calling. Volume is moderately high but falling as the $VIX slowly melts higher, but not enough to erase the market complacency factor.

Today, is a good day to sit back and see where this market is going. This bull market has been climbing steadily for 1,323 session and marks the fourth longest bull run in history. It is looking long in tooth lately and if the bearish pundits are correct, we may see a ‘correction’ of some sort very soon. But my inner self says, don’t count on it happening, not just yet.

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 and that is not enough for me to start shorting. The SP500 MACD has turned flat, but remains above zero at 18.71. I would advise caution in taking any position during this volatile transition period although Barchart.com shows a 32 % buy. Investing.com members’ sentiments are 68 % bearish and Investors Intelligence sets the breath at 67.2 % bullish with the status at Bear Correction.

Bottom line here is that I have not seen any serious bears jumping out of the woods just yet, although I am VERY concerned that ANY minor correction could turn nasty in a heart beat. One significant signal would be losses in any of the major averages that go over the ‘magic’ 3 % and then you need to pay close attention to risk-off tactics. Any market correction over 6% would be an additional signal and I can’t see having one without the other.

It is still possible that Mr. Market is not through playing with the averages and even newer historical highs are a distinct possibility. Historically, accordingly to Eric Parnell, “major bull markets have almost never reached their final peak in a sideways grinding pattern. Instead, they have almost always peaked with flourish including one final crescendo toward a new all-time high before finally rolling over and succumbing to the forces of the new bear market”.

For those who are hell-bent bears, this article, 5 Reasons Your Simple Bear Market Plans Could Backfire, and Stocks Need To Breakout Before They Breakdown should be required reading.

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. Also, the margin debt is very high and has been setting historic highs and as of Monday, 4-7-2014, it stands at $466 billion. (Read More at NYSE Statistics Archive)

It is its ending of QE that worries me the most as many financial institution and emerging markets can not continue to push forward or upwards without the Fed’s ‘Market Viagra’. Even if the Fed reduces its purchases by $10 billion every month for the rest of 2014, the Fed will have acquired $320 billion more for its portfolio. Note, that in 2013, the Fed added more than $1.0 trillion in securities to its portfolio. The debt stands at 4 trillion and will be at 5 trillion by the time the taper is completed and that is one hell of a debt that ‘someone’ has to pay.

The markets are still susceptible to climbing on ‘Bernankellen’ vapor, use caution!

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The DOW at 10:15 is at 16871 down 75 or -0.44%.

The SP500 is at 1946 down 5 or -0.27%.

SPY is at 195.05 down 0.53 or -0.57%.

The $RUT is at 1169 down 4 or -0.35%.

NASDAQ is at 4336 down 2 or -0.05%.

NASDAQ 100 is at 3802 up 1 or 0.03%.

$VIX ‘Fear Index’ is at 11.47 up 0.48 or 4.37%. Bullish Bearish 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.

How Oil Really Gets Priced

WTI oil is trading between 104.78 (resistance) and 104.30 (support) today. The session bias is mixed and is currently trading down at 104.46.

Brent Crude is trading between 109.57 (resistance) and 108.78 (support) today. The session bias is elevated and sideways and is currently trading down at 109.38.

Maybe I’m Wrong – Justifying $2,000+ Gold by Jeffrey Dow Jones

Gold rose from 1259.22 earlier to 1265.31 and is currently trading up at 1262.20. The current intra-session trend is sideways and volatile.

Analysts forecast a corrosive year for copper prices

Dr. Copper is at 3.046 falling from 3.070 earlier.

The US dollar is trading between 80.91 and 80.69 and is currently trading up at 80.80, the bias is currently positive.

Real Time Market Numbers

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Written by Gary