Written by Gary
Opening Market Commentary For 09-05-2014
Premarkets were down -0.35% declining further after yesterday’s close. After the U.S. Financial reporting this morning the US futures zoomed up to + 0.05% and by the opening had fallen to -0.05 %.Moderate red volume led the averages lower as the session got underway by posting lows of -0.20%.
By 10 am the averages were flat, trending sideways on falling low volume. This could be another cross road we have to figure out.
Financial U.S. News was ‘not-so-good’ yet the Hiring slows as U.S. adds 142,000 jobs in August . Interesting sentiment schism after NFP’s writes dailyfx.com; Two distinct camps. 1) No way this is an accurate reading; and 2) I told you so! US is doomed. The unemployment rate remains at 6.1% of mostly part-time and low paying jobs while the change in private payrolls tumble to only 142K. ‘So much for the latest recovery and confirming yet again the unemployment rate has become a completely meaningless metric’, writes zerohedge.com.
WASHINGTON (AP) – U.S. employers added just 142,000 jobs in August, snapping a six-month streak of hiring above 200,000 and posting the smallest gain in eight months.
The Labor Department says the unemployment rate fell to 6.1 percent from 6.2 percent. But the rate dropped because fewer people were working or seeking jobs. Employers also added 28,000 fewer jobs in June and July than the government had previously estimated.
August’s job gains were far below the average monthly increase of 212,000 in the past 12 months. The slowdown was unexpected after most recent economic data suggested that the economy is growing at a healthy pace.
Still, wage gains have been sluggish since the Great Recession ended in 2009, and consumers remain cautious. Consumer spending dipped in July, the first decline since January.
The first column is what was reported this morning. The second column is what analysts were expecting and the third is the last report.
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 down, but remains above zero at 11.91. 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 61.5 % 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 10 Year Treasury Note Yield Index ($TNX) is at 24.12. (Chart Here) Treasury Yield Curve Approaches Flattest Since 2009.
StockChart.com Overbought / Oversold Index ($NYMO) is at -2.78. (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, signaling a market reversal and it has started.
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. Wednesday, 9-3-2014, XLY edged up to 69.25 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!
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 17060 down 7 or -0.04%.
The SP500 is at 1998 up 0.27 or 0.01%.
SPY is at 200.23 up 0.01 or 0.00%.
The $RUT is at 1168 up 0.76 or 0.07%.
NASDAQ is at 4565 up 3 or 0.07%.
NASDAQ 100 is at 4071 up 5 or 0.12%.
$VIX ‘Fear Index’ is at 12.46 down 0.18 or -1.42%. Bearish to 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 negative and the current bias is negative, volatile and sideways.
WTI oil is trading between 94.98 (resistance) and 94.07 (support) today. The session bias is negative and is currently trading down at 94.37. (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.)
The general consensus is that gold prices will actually fall in the next twelve months (Sept to Aug. 2015). Goldman Sachs estimates that gold will fall to $1,050 an ounce, a drop of nearly 19%.
Gold rose from 1263.32 earlier to 1274.36 and is currently trading down (reversing course) at 1266.20. The current intra-session trend is negative. (Chart Here)
Dr. Copper is at 3.154 falling from 3.162 earlier. Very volatile this morning. (Chart Here)
The US dollar is trading between 83.96 and 83.58 and is currently trading down at 83.69, the bias is currently neutral 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
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:
Written by Gary