Market Commentary: Markets Experience Fractional Sell-Off, Brent Near $100

Written by Gary

Midday Market Commentary For 09-02-2014

The large caps took the plunge at the noontime hour on low volume while the small caps remained in the green for now.

By 12 pm the averages were displaying signs of stress that may accumulate into a down day for the averages as Brent falls close to $100. The bear is making his presents known today.

Down days over the past several years have been excellent for buying the dip and profiting and as of right now, this appears to be another one. The cautionary tip of course is that today may be different and the ‘dip’ may turn into a correction that may turn into something even larger.

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 flat, but remains above zero at 12.99. 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 58 % 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 60.9 % bullish with the status at Bear Confirmed. (Chart Here )

StockChart.com NYSE Bullish Percent Index ($BPNYA) is at 65.56. (Chart Here) Very close to resistance now and rising.

StockChart.com S&P 500 Bullish Percent Index ($BPSPX) is at 76.20. (Chart Here) Remains below support, now resistance.

StockChart.com 10 Year Treasury Note Yield Index ($TNX) is at 24.05. (Chart Here) Treasury Yield Curve Approaches Flattest Since 2009.

StockChart.com Overbought / Oversold Index ($NYMO) is at 40.93. (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 68.82. (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) This chart clearly shows that dropping below 65.50 should be of a great concern to bullish investors. Today, 9-2-2014, XLY edged up to 69.17 and that is another notch in the gun signaling that we might have another reversal very soon – at least to cover the gap below at 67.85. Protect thyself!

The DOW at 12:00 is at 17054 down 45 or -0.26%.

The SP500 is at 1999 down 5 or -0.24%.

SPY is at 200.27 down 0.45 or -0.22%.

The $RUT is at 1174 down 0.68 or -0.06%.

NASDAQ is at 4583 up 3 or 0.07%.

NASDAQ 100 is at 4085 up 3 or 0.06%.

$VIX ‘Fear Index’ is at 12.51 up 0.53 or 4.42%. 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 neutral and the current bias is negative.

How Oil Really Gets Priced

WTI oil is trading between 95.87 (resistance) and 93.51 (support) today. The session bias is negative and is currently trading up at 93.59. (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 5H time scale.)

Brent Crude is trading between 102.86 (resistance) and 100.65 (support) today. The session bias is negative and is currently trading down at 100.69. (Chart Here)

Why Gold Will Rise When The Dollar Falls

Gold fell from 1288.10 earlier to 1263.08 and is currently trading down at 1264.20. The current intra-session trend is negative. (Chart Here)

Dr. Copper is at 3.149 rising from 3.139 earlier. (Chart Here)

The US dollar is trading between 83.05 and 82.78 and is currently trading up at 83.00, the bias is currently positive. (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