Written by Gary
Midday Market Commentary For 08-22-2014
Action is over for the day it seems as a lot of Wall Streeter’s are heading for the subways at the noon hour. Market is becoming very quiet except for the murmuring fans of the HFT algo computers. Volume is falling to anemic levels as most averages are trading in a down, but sideways, narrow zone.
By noon some analysts are betting the markets will close in the green and that is entirely one of the possibilities for this session.
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 up, but remains above zero at +7.34. 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.
StockChart.com Overbought / Oversold Index ($NYMO) is at 51.28. (Chart Here) (Need to type in $NYMO) It is now around the area where it turns and starts 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.
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 12:30 is at 17035 down 5 or -0.03%.
The SP500 is at 1992 down 0.52 or -0.03%.
SPY is at 199.55 up 0.01 or 0.01%.
The $RUT is at 1162 up 2 or 0.21%.
NASDAQ is at 4546 up 14 or 0.30%.
NASDAQ 100 is at 4060 up 13 or 0.32%.
$VIX ‘Fear Index’ is at 11.92 up 0.17 or 1.45%. 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 flat, but VERY volatile.
WTI oil is trading between 94.04 (resistance) and 92.94 (support) today. The session bias is negative and is currently trading up at 93.23. (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 102.80 (resistance) and 101.99 (support) today. The session bias is negative, volatile and is currently trading up at 102.31. (Chart Here)
Gold fell from 1283.70 earlier to 1275.19 and is currently trading up at 1281.90. The current intra-session trend is positive and volatile. (Chart Here)
Dr. Copper is at 3.208 rising from 3.170 earlier. (Chart Here)
The US dollar is trading between 82.51 and 82.12 and is currently trading down at 82.39, 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