Market Commentary: SP500 Makes New Historic And Closing Highs

Written by Gary

Closing Market Commentary For 08-21-2014

Afternoon markets slowly, on low volume, melted higher to a new SP500 high (1994.76) to show the bulls are not going to give up easy.

By 4 pm the market place was flooded with green and the party hats were on once again.

Well, here we are again with new highs. Feeling a little shaky, you are not alone.

No, new ‘all-time highs’ don’t mean the market is due for a crash

“All-time high” is a headline that seems to scare investors. But Ben Carlson notes that all-time highs are “perfectly normal” and don’t serve as a signal that a big downturn is imminent.

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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 up, but remains above zero at +5.63. I would advise caution in taking any position during this uncertain period although some technical indicators have starting to turn bearish.

Investing.com members’ sentiments are 47 % 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 59.0 % bullish with the status at Bear Confirmed. (Chart Here )

StockChart.com NYSE Bullish Percent Index ($BPNYA) is at 63.72. (Chart Here) Very close to support, but rising.

StockChart.com S&P 500 Bullish Percent Index ($BPSPX) is at 73.00. (Chart Here) Remains below support, now resistance.

StockChart.com Overbought / Oversold Index ($NYMO) is at 49.75. (Chart Here) (Need to type in $NYMO) It is now around the area where it turns and start to descend, but any thing below -30 / -40 is a concern. Oversold conditions on the NYSE McClellan Oscillator usually bounce back at anything over -50 and reverse after reaching +40 oversold. Wednesday, 8-20-2014, $NYMO climbed to +58.24 is signaling a market reversal in our near future.

StockChart.com Consumer Discretionary ETF (XLY) is at 68.52. (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. Wednesday 8-20-2014, XLY edged up to 68.68 and that is another notch in the gun signaling that we might have another reversal very soon – at least to cover the gap below. Protect thyself!

The DOW at 4:00 is at 17039 up 60 or 0.36%.

The SP500 is at 1992 up 5.86 or 0.29%.

SPY is at 199.51 up 0.54 or 0.27%.

The $RUT is at 1160 up 2.52 or 0.22%.

NASDAQ is at 4532 up 6 or 0.12%.

NASDAQ 100 is at 4047 up 6 or 0.16%.

$VIX ‘Fear Index’ is at 11.76 down 0.02 or -0.17%. Neutral Movement

(Follow Real Time Market Averages at end of this article)

The longer trend is up, the past months trend is net positive, the past 5 sessions have been positive and the current bias is elevated and sideways.

How Oil Really Gets Priced

WTI oil is trading between 94.43 (resistance) and 92.63 (support) today. The session bias is positive and is currently trading up at 93.98. (Chart Here) There is a very large gap at 97.06 and these types of gaps are usually filled sooner rather than later. It would not surprise me to see the oils move back up in the very near future. (Chart Here) (Look at the 60 minute time scale.)

Brent Crude is trading between 102.78 (resistance) and 101.20 (support) today. The session bias is positive and is currently trading up at 102.69. (Chart Here)

Why Gold Will Rise When The Dollar Falls

Gold fell from 1292.16 earlier to 1274.54 and is currently trading down at 1278.10. The current intra-session trend is negative and trending sideways. (Chart Here)

Dr. Copper is at 3.177 rising from 3.150 earlier. (Chart Here)

The US dollar is trading between 82.41 and 82.15 and is currently trading down at 82.20, the bias is currently trending down. (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

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