Written by Gary
Midday Market Commentary For 08-13-2014
By the noon hour, the averages stopped the morning melt-off and returned to trending upwards thanks to the BTFDers. Volume is falling off, but our proprietary market direction meter is becoming more bearish as the markets post new session highs.
The current volatility in the US dollar and gold has us sitting on our hands as we look for market direction.
We expect the markets to close down from this current levels.
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 below zero at -6.05. 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 44 % 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 –3.63. (Chart Here) (Need to type in $NYMO) Oversold conditions on the NYSE McClellan Oscillator usually bounce back at anything over -50. Being close to the zero mark is good but not out of the woods just yet.
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 DOW at 12:00 is at 16653 up 93 or 0.56%.
The SP500 is at 1946 up 13 or 0.65%.
SPY is at 194.84 up 1.32 or 0.68%.
The $RUT is at 1142 up 9 or 0.78%.
NASDAQ is at 4429 up 39 or 0.90%.
NASDAQ 100 is at 3943 up 38 or 0.97%.
$VIX ‘Fear Index’ is at 13.09 down 1.04 or -7.36%. Bullish Movement
(Follow Real Time Market Averages at end of this article)
The longer trend is up, the past months trend is net gain, the past 5 sessions have been positive and the current bias is elevated, but melting downwards.
WTI oil is trading between 97.63 (resistance) and 96.77 (support) today. The session bias is negative and is currently trading down at 97.03. (Chart Here)
Brent Crude is trading between 104.37 (resistance) and 103.26 (support) today. The session bias is positive and is currently trading down at 104.10. (Chart Here)
Gold rose from 1306.09 earlier to 1316.22 and is currently trading down at 1313.10. The current intra-session trend is neutral, volatile and trending down. (Chart Here)
Dr. Copper is at 3.114 falling from 3.139 earlier. (Chart Here)
The US dollar is trading between 81.73 and 81.40 and is currently trading down at 81.69, the bias is currently positive and volatile. (Chart Here)
The markets are still susceptible to climbing on ‘Bernankellen’ vapor, use caution!
“Investors should remember that excitement and expenses are their enemies. And if they insist on trying to time their participation inequities, they should try to be fearful when others are greedy and greedy only when others are fearful.” – Warren Buffett
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Written by Gary