Written by Gary
Closing Market Commentary For 07-18-2014
Today was a correction day, smoothing out the relatively steep fall of yesterday’s session. The Malaysian airliner shoot-down has become less important along with the Israeli invasion of Gaza.
By 4 pm investors were still watching World events and remain worried while some BTFDers jumped in at the minute to snatch up ‘bargains’. Volume was low to moderate and signals caution.
I would not characterize today’s session as ‘shrugging at Global disorders’, but the averages didn’t fall either.
Stocks Shrug At Global Disorder, Squeezed Back To Record Highs
Just imagine how high stocks would be if more jets were shot down in Ukraine, more ground operations were unleashed in Gaza, more sanctions were placed on global growth, more European and US macro data disappointed, more job cuts at major firms, and more European banks declared bankruptcy.
Today’s farcical Friday surge (with the Nasdaq up 2% from its overnight lows and 30 point rip in the S&P) appears 100% based on the squeezing of “most shorted” stocks (best day in over a month) and the ramping of AUDJPY. Credit markets ignored the idiocy; Treasury markets ignored it;
The USD went nowhere (after EUR dumped on Italy downgrade then recovered). Gold, Silver, and Copper all closed down 2-3% on the week (given back yesterday’s gains) as Oil surged 2.2%. VIX dropped over 2 vols to close with a 12-handle (but disconnected notably from stocks at the close).
It’s not all ponies and unicorns though – Biotechs are down 5% from Yellen’s comments and the Russell 2000 closed red for the 2nd week in a row (and still -1% year-to-date). Best Dow Friday in 5 months (up 11 in a row).
The medium term indicators are 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 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 down, but remains above zero at 9.96. I would advise caution in taking any position during this uncertain period.
Barchart.com shows a 88 % buy. (Been at 88% for the last 6 sessions, I think their meter is broken) Investing.com members’ sentiments are 59 % bearish and Investors Intelligence sets the breath at 66.7 % bullish with the status at Bear Correction. (Chart Here )
StockChart.com NYSE Bullish Percent Index ($BPNYA) is at 71.47. (Chart Here )
StockChart.com S&P 500 Bullish Percent Index ($BPSPX) is at 82.80. (Chart Here )
StockChart.com Consumer Discretionary ETF (XLY) is at 67.50. (Chart Here )
Chris Ciovacco says, “As long as the consumer discretionary ETF (NYSEARCA:XLY) holds above 67.06, all things being equal, it is a good sign for stocks and the U.S. economy.” (Actually the support looks to be in the 66.88 range)
The markets are still susceptible to climbing on ‘Bernankellen’ vapor, use caution!
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The DOW at 4:00 is at 17100 up 123 or 0.73%.
The SP500 is at 1978 up 20 or 1.03%.
SPY is at 197.63 up 2.00 or 1.02%.
The $RUT is at 1152 up 18 or 1.59%.
NASDAQ is at 4432 up 61 or 1.57%.
NASDAQ 100 is at 3940 up 62 or 1.60%.
$VIX ‘Fear Index’ is at 12.14 down 2.40 or -16.51%. 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 up and the current bias is Elevated, Melting Sideways.
WTI oil is trading between 103.84 (resistance) and 102.58 (support) today. The session bias is sideways, volatile and is currently trading down at 102.98.
Brent Crude is trading between 108.61 (resistance) and 106.94 (support) today. The session bias is trending down and is currently trading up at 107.21.
Gold prices sink as worries over Europe that drove prices up last week dissipate
Gold fell from 1325.30 earlier to 1305.19 and is currently trading down at 1310.90. The current intra-session trend is negative and quiet.
Dr. Copper is at 3.188 falling from 3.204 earlier.
The US dollar is trading between 80.75 and 80.54 and is currently trading down at 80.61, the bias is currently negative and quiet.
Real Time Market Numbers
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