Written by Gary
Closing Market Commentary For 08-14-2014
The markets were all up this afternoon with a fractional trend upwards to close on a very good note but on anemic volume.
By 4 pm the averages made a stab for the gold ring on moderate volume gaining +0.05% during the last minute of the session and setting a high for the day. The overall anemic volume is NOT a bullish sign for tomorrow.
Our short term market direction meter is solidly bearish this afternoon and I would not be at all surprised to see the markets decline tomorrow. It hasn’t been this bearish since the market took a dump on 7-31-2014. The extremely low, anemic volume supports this theory because the human’s are not buying or selling, but apparently preparing to jump ship if need too.
Overnight weakness in Japan and Europe was no big catalysts for markets either way, but the moment Vladimir Putin uttered the words “avoid conflict” (as [opposed] to saying ‘destroy all of you’?), stocks took off.
Weak jobless claims data sparked a dump but once cash markets opened, it was on like donkey kong as the worst volume day of a terrible volume week took stocks higher on the back of USDJPY.
For the technically-minded, the S&P is testing up to its 50-day moving-average (DMA), Russell finding resistance at 100/200DMA, Trannies broke back above the 50DMA, and Nasdaq is on course for new highs.
All this exuberance in stocks was shared by bonds as buyers bid 30Y yields to a 3.18% handle – lowest in 15 months (gaping divergence to stocks this week). USD oscillated but ended unch.
Gold and silver limped higher as copper and crude were monkey-hammered. VIX ended at 3-week lows (after an opening slam lower) for day 15 of inversion. S&P futures volume 55% below average.
The medium term indicators are still 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 (a lot anyway) and that is not enough for me to start shorting. The SP500 MACD has turned up, but remains below zero at -6.24. 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 48 % 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 +21.17. (Chart Here) (Need to type in $NYMO) Oversold conditions on the NYSE McClellan. It is around the area where it turns and start to descend, but any thing below 30 / 40 is a concern.
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 4:00 is at 16714 up 62 or 0.37%.
The SP500 is at 1955 up 8.46 or 0.43%.
SPY is at 195.91 up 0.89 or 0.46%.
The $RUT is at 1143 up 1.56 or 0.14%.
NASDAQ is at 4453 up 19 or 0.43%.
NASDAQ 100 is at 3969 up 20 or 0.50%.
$VIX ‘Fear Index’ is at 12.43 down 0.47 or -3.64%. Neutral Movement
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The longer trend is up, the past months trend is net positive, the past 5 sessions have been positive and the current bias is positive.
WTI oil is trading between 97.58 (resistance) and 95.27 (support) today. The session bias is negative and is currently trading down at 95.42. (Chart Here)
Brent Crude is trading between 105.09 (resistance) and 101.92 (support) today. The session bias is negative and is currently trading down at 102.08. (Chart Here)
Gold rose from 1310.22 earlier to 1320.58 and is currently trading down at 1314.00. The current intra-session trend is neutral and volatile. (Chart Here)
Dr. Copper is at 3.088 falling from 3.119 earlier. (Chart Here)
The US dollar is trading between 91.75 and 81.45 and is currently trading up at 81.63, the bias is currently positive. (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