Written by Gary
Closing Market Commentary For 08-07-2014
The averages took an unexpected turn down this afternoon, but the prognosis is still fair to good. The SP500 and SPY closed down below the 100 DMA and the DOW went below the 200 DMA for the first time since February this year but closed above it.
By 4 pm the averages were all reporting in the red on low to moderate volume. Some investors seemed spooked on growing ‘issues’ in the Ukraine and have decided to jump ship, but most analysts insist that this will be a mistake in the long run. However, praying is not always a bad thing.
The markets are most definitely at a financial crossroad and stuck in the middle of the road. Unless an 18 wheeler comes speeding through the intersection, most feel this correction will finally melt its way through and test its previous highs. That is when many analysts believe that will be a ‘coming to Jesus’ moment for investors still in the long position. Decisions WILL have to be made most likely before then.
The medium term indicators are leaning (barely) 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 below zero at -10.07. 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 46 % 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.
StockChart.com Overbought / Oversold Index ($NYMO) is at -58.32. (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, but today they didn’t crash, then again tomorrow may be a deal breaker.
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.
The markets are still susceptible to climbing on ‘Bernankellen’ vapor, use caution!
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The DOW at 4:00 is at 16368 down 75 or -0.46%.
The SP500 is at 1910 down 11 or -0.56%.
SPY is at 191.15 down 1.04 or -0.54%.
The $RUT is at 1120 down 6 or -0.51%.
NASDAQ is at 4335 down 20 or -0.46%.
NASDAQ 100 is at 3858 down 16 or -0.42%.
$VIX ‘Fear Index’ is at 16.66 up 0.29 or 1.77%. Neutral Movement
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The longer trend is up, the past months trend is positive, the past 5 sessions have been net neutral and the current bias is negative.
WTI oil is trading between 97.71 (resistance) and 96.55 (support) today. The session bias is positive, volatile and is currently trading down at 97.59.
Brent Crude is trading between 105.92 (resistance) and 104.16 (support) today. The session bias is positive and is currently trading down at 105.89.
Gold rose from 1309.91 earlier to 1315.50 and is currently trading up at 1312.60. The current intra-session trend is elevated, sideways and volatile.
Dr. Copper is at 3.171 rising from 3.158 earlier.
The US dollar is trading between 81.72 and 81.44 and is currently trading up at 81.59, the bias is currently sideways and quiet.
Real Time Market Numbers
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Written by Gary