Written by Gary
Closing Market Commentary For 09-05-2014
SP500 continued to rise along with the other averages and closed at a new closing high of 2007.71. The DOW didn’t make a new closing high, but came within a point.
By 4 pm my earlier guesses were off as the markets continued to climb on a relatively quiet Friday afternoon. Aftermarket SPY showed some extremely heavy selling on unusual heavy volume. So, what are your plans for Monday? Ready to panic yet?
The markets keep going up and investors are getting the ‘worries’.
Worst jobs data of the year? BTFATH. For the 9th day in a row, S&P 2,000 was all that mattered. Thanks to the standard Friday v-shaped recovery, the Dow scrambled back to green on the week and S&P 500 hit its Maginot ‘retirement on’ line – all on the back of USDJPY 105.00 pinning.
Trannies and S&P hit new record highs and S&P had its best day in 2 weeks (led by exuberant growthy Staples & Utilities this week). Russell ended the week red as the late-day buying-panic sent Nasdaq just green with Dow and S&P.
But, away from stocks, US Treasuries had their worst week in a year with 30Y +16bps (but 2Y only +2bps). The US dollar rose to new 14-month highs with its biggest week in 10 months.
Despite the USD strength, Copper manage to close marginally higher even as PMs dropped 1.6% and oil plunged almost 3% (WTI under $93) in a very volatile week.
High-yield credit markets closed with their worst week in the last 5. Bad news is great news still – just six years into the ‘recovery’.
If it hasn’t obvious to the ‘Sheeples’ seeing what is really going on in the U.S., the EU and China, it should be by now. Read my weekend commentary tomorrow (and Sunday) for an insight how the World problems are going to exacerbate the ‘issues’ already here in the U.S. and perhaps bring on another recession.
The medium term indicators are leaning towards the hold side at the close. The all important signs of reversal, up or down, have not been observed so we are mostly, at best, neutral and conservatively holding. The important DMA’s, volume and a host of other studies have not turned and that is not enough for me to start shorting, but now I am very concerned. The SP500 MACD has turned flat, but remains above zero at 13.16. I would advise caution in taking any position during this uncertain period although some technical indicators have starting to turn bearish.
Investing.com members’ sentiments are 62 % bearish and when it switches over to bullish, as it did on Tuesday 8-5, watch for the market bottom to fall out some are saying as the markets usually go against ‘Sheeple’ buying high and selling low.
StockChart.com 10 Year Treasury Note Yield Index ($TNX) is at 24.61. (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!
The DOW at 4:00 is at 17137 up 68 or 0.40%.
The SP500 is at 2007.71 up 10 or 0.50%.
SPY is at 201.18 up 0.90 or 0.45%.
The $RUT is at 1170 up 2.92 or 0.25%.
NASDAQ is at 4583 up 21 or 0.45%.
NASDAQ 100 is at 4090 up 24 or 0.59%.
$VIX ‘Fear Index’ is at 12.09 down 0.55 or -4.35%. Bullish 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 positive.
WTI oil is trading between 94.98 (resistance) and 92.88 (support) today. The session bias is negative and is currently trading up at 93.48. (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 1269.40. The current intra-session trend is trending up. (Chart Here)
Dr. Copper is at 3.171 rising from 3.143 earlier. Very volatile this morning. (Chart Here)
The US dollar is trading between 83.96 and 83.58 and is currently trading up at 83.79, the bias is currently sideways. (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