Written by Gary
Midday Market Commentary For 07-08-2014
The averages continued to fall all morning and do not seem to have let up for the afternoon session.
By noon the weakness of the averages looks to spill over into the afternoon as we await the 3 pm US Consumer Credit Report for May and would suggest being cautious.
This ‘correction’, so far, may still be part of a consolidation and it would be prudent not to jump to bearish conclusions just yet. We have repeatedly seen over the past year how the market recovers bullishly after 2 ‘good’ down days and tomorrow should be the turn-around.
The medium term indicators are leaning towards the hold side at the midday. 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 14.69. I would advise caution in taking any position during this volatile period.
Barchart.com shows a 88 % buy. (Their meter is broken I think) Investing.com members’ sentiments are 62 % bearish and Investors Intelligence sets the breath at 69.5 % bullish with the status at Bear Correction. (Chart Here)
The Dow Jones has set a new record above 17,000.
The NFP came out with a stronger than expected number of 288,000 new jobs for June.
Wage growth remains low, well below the level the Fed would like to see.
The U.S. economic recovery is not on sure footing yet. There are foundation issues, especially in the housing market and with wages. The Fed should take into account these problems before raising rates. The Fed is in the middle of tapering its massive bond buying program, hoping to end it by end of October 2014. They have continued to keep short term rates near zero, amid speculation they will raise them soon. The Fed is correct in keeping them as is. It is still too early to raise rates. While 200K new jobs a month is a good thing, a print of 300K would point to a stronger economic recovery.
There are reasons to be concerned. While there is a feeling of euphoria over the Dow Jones hitting 17,000 and closing above it, do not expect it to stay at this level. There is no real economic growth supporting it.
The markets are still susceptible to climbing on ‘Bernankellen’ vapor, use caution!
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The DOW at 12:00 is at 16894 down 131 or -0.77%.
The SP500 is at 1962 down 16 or -0.80%.
SPY is at 196.03 down 1.48 or -0.75%.
The $RUT is at 1168 down 19 or -1.56%.
NASDAQ is at 4380 down 72 or -1.61%.
NASDAQ 100 is at 3857 down 55 or -1.42%.
$VIX ‘Fear Index’ is at 12.40 up 1.09 or 9.62%. Slightly Bearish Movement. (Not rising in sync with markets falling)
(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 104.12 (resistance) and 103.25 (support) today. The session bias is negative and is currently trading down at 103.34 and volatile.
Brent Crude is trading between 110.06 (resistance) and 109.08 (support) today. The session bias is negative and is currently trading down at 109.14.
Maybe I’m Wrong – Justifying $2,000+ Gold by Jeffrey Dow Jones
Gold fell from 1325.71 earlier to 1314.42 and is currently trading up at 1315.40 (and falling). The current intra-session trend is negative and volatile.
Dr. Copper is at 3.256 falling from 3.293 earlier.
The US dollar is trading between 80.34 and 80.19 and is currently trading down at 80.21, the bias is currently sideways and quiet. There is a gap that will be filled in sooner than later that requires the Dollar to retrace its numbers back down to 80.10.
Real Time Market Numbers
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Written by Gary