Market Commentary: Another New High For The SP500 On Anemic Volume

Written by Gary

Midday Market Commentary For 08-25-2014

SP500 eases up again to a new high of 2001.95 and has remained withing pennies of that level since 11 this morning. We all know that the 2 K level would be a game changer and now we are waiting to see how much higher it will go.

By noon the averages were all enjoying the green glow of a bull market and expect a new closing high for the SP500 today. The caution flag has been replaced with a warning flag as the averages seem to be rolling over as volume is anemic.

The markets should melt higher in the next several sessions, even in the wake of poor financial news. The trigger that could derail this bull market could come in a variety of events, but none of the current ones (gray swans and chicks) are active enough just now, but it wouldn’t take much.

Another 4% to 5% dip is a real near-term possibility and like the last one may provide another opportunity to buy the dip.

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,but I am now concerned. The SP500 MACD has turned up, but remains above zero at +9.31. 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 55 % 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 59.6 % bullish with the status at Bear Confirmed. (Chart Here )

StockChart.com NYSE Bullish Percent Index ($BPNYA) is at 64.74. (Chart Here) Very close to support, but rising.

StockChart.com S&P 500 Bullish Percent Index ($BPSPX) is at 75.40. (Chart Here) Remains below support, now resistance.

StockChart.com 10 Year Treasury Note Yield Index ($TNX) is at 23.93. (Chart Here) Treasury Yield Curve Approaches Flattest Since 2009.

StockChart.com Overbought / Oversold Index ($NYMO) is at 30.17. (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.

StockChart.com Consumer Discretionary ETF (XLY) is at 68.83. (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. Today 8-25-2014, XLY edged up to 68.98 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 12:15 is at 17099 up 97 or 0.57%.

The SP500 is at 1999 up 11 or 0.57%.

SPY is at 200.29 up 1 or 0.55%.

The $RUT is at 1166 up 6 or 0.52%.

NASDAQ is at 4560 up 22 or 0.48%.

NASDAQ 100 is at 4070 up 18 or 0.43%.

$VIX ‘Fear Index’ is at 11.34 down 0.13 or -1.13%. 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 positive.

How Oil Really Gets Priced

WTI oil is trading between 93.94 (resistance) and 93.07 (support) today. The session bias is neutral and is currently trading down at 93.41. (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 102.77 (resistance) and 101.78 (support) today. The session bias is fractionally positive, but very volatile and is currently trading down at 102.12. (Chart Here)

Why Gold Will Rise When The Dollar Falls

Gold fell from 1282.08 earlier to 1276.47 and is currently trading up at 1277.20. The current intra-session trend is neutral and volatile. (Chart Here)

Dr. Copper is at 3.233 rising from 3.202 earlier. (Chart Here)

The US dollar is trading between 82.65 and 82.36 and is currently trading down at 82.56, the bias is currently sideways and quiet. (Chart Here) NOTE: There is a large gap at 82.38 and the dollar is expected to fall and close that gap.

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

If you would like to get advanced buy/sell tweets, sign-up in the column to the right of this post by clicking on the ‘Follow‘ button. Write me with suggestions and I promise not to bite.

Real Time Market Numbers

To contact me with questions, comments or constructive criticism is always encouraged and appreciated:

[email protected]

Written by Gary