Written by Gary
Opening Market Commentary For 08-27-2014
Premarkets were flat, but markets opened up +0.10% on low volume. Investors are keenly aware of the low volume statistics, its bearish implications and are watching it carefully.
By 10 am the markets were flat and trending fractionally south on low volume.
Today’s session might be a quiet one that could be a consolidation of sorts before moving upwards again.
The medium term indicators are leaning towards the hold side at the opening. 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 11.64. 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 ($BPNYA) is at 64.96. (Chart Here) Very close to resistance now and rising.
StockChart.com S&P 500 Bullish Percent Index ($BPSPX) is at 75.80. (Chart Here) Remains below support, now resistance.
StockChart.com 10 Year Treasury Note Yield Index ($TNX) is at 23.75. (Chart Here) Treasury Yield Curve Approaches Flattest Since 2009.
StockChart.com Overbought / Oversold Index ($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 68.87. (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. Monday, 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!
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 10:00 is at 17094 down 14 or -0.08%.
The SP500 is at 1999 down 2 or -0.08%.
SPY is at 200.16 down 0.18 or -0.09%.
The $RUT is at 1173 down 2 or -0.19%.
NASDAQ is at 4564 down 7 or -0.15%.
NASDAQ 100 is at 4067 down 5 or -0.12%.
$VIX ‘Fear Index’ is at 11.89 up 0.26 or 2.24%. 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 93.84 (support) today. The session bias is neutral and is currently trading up at 94.09. (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 102.48 (support) today. The session bias is neutral and is currently trading down at 102.83. (Chart Here)
Gold: More Hawkish Fed Minutes Could Create Headwinds
Gold fell from 1288.31 earlier to 1283.52 and is currently trading down at 1284.20. The current intra-session trend is trending down. (Chart Here)
Dr. Copper is at 3.193 falling from 3.215 earlier. (Chart Here)
Dollar Slips While Bond Market Rally Continues
The US dollar is trading between 82.71 and 82.51 and is currently trading down at 82.57, 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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