Written by Gary
Midday Market Commentary For 08-27-2014
Volume at anemic levels, averages sea-sawing, obvious manipulation by the HFT algo computers and the ‘Magicians’ of Wall Street.
By noon the averages have gone to green, to red and back to green. All the while remaining flat and noncommittal as to future direction. I wish this was Friday, so I could leave early.
But watch out boring markets can have sudden reversals, especially if Ms. Yellen passes wind. It is all about the Fed right now.
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 now I am very concerned. The SP500 MACD has turned up, but remains above zero at 11.75. 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 54 % 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 60.5 % bullish with the status at Bear Confirmed. (Chart Here )
StockChart.com NYSE Bullish Percent Index ($BPNYA) is at 65.08. (Chart Here) Very close to resistance now and rising.
StockChart.com S&P 500 Bullish Percent Index ($BPSPX) is at 76.00. (Chart Here) Remains below support, now resistance.
StockChart.com 10 Year Treasury Note Yield Index ($TNX) is at 23.71. (Chart Here) Treasury Yield Curve Approaches Flattest Since 2009.
StockChart.com Overbought / Oversold Index ($NYMO) is at 44.53. (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 68.93. (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, 8-27-2014, XLY edged up to 69.03 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!
Bottom line here is that I have not seen any serious bears jumping out of the woods just yet, although I am VERY concerned that ANY minor correction could turn nasty in a heart beat. One significant signal would be daily losses in any of the major averages that go over the ‘magic’ 3 % and then you need to pay close attention to risk-off tactics. There hasn’t been a 10% correction in several years and some investors are becoming increasingly concerned an imminent correction is on the way.
Sometime in the future, there will be another three percent drop, only it will go to four, recover somewhat and the BTFDers will cry halleluiah and buy again. Only this time it doesn’t recover fully like in the past and drops again, increasing the net drop to seven percent and so on.
The DOW at 12:00 is at 17120 up 13 or 0.08%.
The SP500 is at 2000 up 0.66 or 0.03%.
SPY is at 200.40 up 0.07 or 0.03%.
The $RUT is at 1174 down 1 or -0.11%.
NASDAQ is at 4572 up 2 or 0.04%.
NASDAQ 100 is at 4075 up 4 or 0.09%.
$VIX ‘Fear Index’ is at 11.74 up 0.11 or 0.95%. 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 negative.
Oil Could Keep Falling, Despite Stagnant Production
WTI oil is trading between 94.23 (resistance) and 93.45 (support) today. The session bias is negative and is currently trading down at 93.52. (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 103.06 (resistance) and 102.17 (support) today. The session bias is negative and is currently trading down at 102.17. (Chart Here)
Gold: More Hawkish Fed Minutes Could Create Headwinds
Gold fell from 1288.31 earlier to 1282.07 and is currently trading up at 1283.60. The current intra-session trend is trending down. (Chart Here)
Dr. Copper is at 3.197 falling from 3.215 earlier. (Chart Here)
Dollar Slips While Bond Market Rally Continues
The US dollar is trading between 82.71 and 82.43 and is currently trading up at 82.52, the bias is currently negative. (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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