Market Commentary: Market Open Down Melt Up To Flat Status, Session Direction Not Confirmed

Written by Gary

Opening Market Commentary For 08-06-2014

The premarkets were off almost a point and remained that way until the opening. The averages jumped up at the opening and were in the green by 10 am and then eased back into the red, but flat and sea-sawing back and forth across the even line on low volume.

The session trend is upward so far, but there is no reliable indicator that defines a direction for today’s session. But for now it is upwards.

The medium 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 down, but remains below zero at -7.61. I would advise caution in taking any position during this uncertain period although some technical indicators are starting to turn bearish.

Investing.com members’ sentiments are 45 % bearish and when it switches over to bullish, as it did on Tuesday 8-5, watch for the market bottom to fall out some are saying as the markets usually go against ‘Sheeple’ buying high and selling low.

Investors Intelligence sets the breath at 59.5 % bullish with the status at Bear Confirmed. (Chart Here )

StockChart.com NYSE Bullish Percent Index ($BPNYA) is at 62.88. (Chart Here) Very close to support.

StockChart.com S&P 500 Bullish Percent Index ($BPSPX) is at 71.60. (Chart Here) Closed below support.

The Market Is Overpriced But The Correction Will Likely Be Shallow

StockChart.com Overbought / Oversold Index ($NYMO) is at -78.56. (Chart Here) (Need to type in $NYMO) Oversold conditions on the NYSE McClellan Oscillator usually bounce back at anything over -50, but this time things may be different – where have I heard this before? Tuesday’s (8-5) numbers are definitely not a good sign.

StockChart.com Consumer Discretionary ETF (XLY) is at 65.71. (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) We have entered an area that concerns me should the XLY drops any further. This chart clearly shows that dropping below 65.50 should be of a great concern to bullish investors.

The next green support line is a good guess to where the correction is going to go. XLY closed with a ‘spinning top’ candle on Friday 08-01-2014 indicating a reversal. The chart indicated a reversal with a spinning top (blue arrow) and was confirmed the next day, but it was up the next session again. Charts sometimes have to be taken with a grain of salt, as they say. In this case we are close enough to be worried anyway.

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, like this one, could turn nasty in a heart beat. One significant signal would be daily 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. There hasn’t been a 10% correction in several years and some investors are becoming increasingly concerned an imminent correction is on the way.

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”.

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

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The DOW at 10:30 is at 16444 up 15 or 0.09%.

The SP500 is at 1922 up 2 or 0.09%.

SPY is at 192.33 up 0.31 or 0.16%.

The $RUT is at 1125 up 3 or 0.30%.

NASDAQ is at 4357 up 5 or 0.12%.

NASDAQ 100 is at 3880 up 5 or 0.13%.

$VIX ‘Fear Index’ is at 16.33 down 0.55 or -3.56%. 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 negative and the current bias is positive.

How Oil Really Gets Priced

Crude oil prices fall to six-month lows on refinery outlook

WTI oil is trading between 97.96 (resistance) and 97.34 (support) today. The session bias is positive and is currently trading down at 97.80.

Brent Crude is trading between 105.30 (resistance) and 104.63 (support) today. The session bias is sideways with a positive trend and is currently trading down at 105.09.

Gold rose from 1289.01 earlier to 1310.39 and is currently trading up at 1309.10. The current intra-session trend is positive.

Dr. Copper is at 3.167 falling from 3.191 earlier.

The US dollar is trading between 81.77 and 81.60 and is currently trading up at 81.66, the bias is currently neutral with a negative slant.

Real Time Market Numbers

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Written by Gary