Written by Gary
Closing Market Commentary For 09-17-2014
FMOC reaction was at first a major sell-off then the BTFDers jumped in and pushed the DOW to a new historic high (17221.11) on relatively high volume. The SP500 climbed within a half point of its previous high and backed off its now double top along with the DOW’s double top.
By 4 pm the SP500, DOW and the SPY had retraced from its highs and closed BELOW its previous Historical closing high, not a reassuring sign of a continuing bull market.
The volume tell the story in that it depicts a distinct split between the bears and bulls, more than normal and that is concerning if you are one of the bulls.
What in January 2012 was a 2014 GDP forecast range of 3.7%-4.0% collapsed to 2.1%-2.3% in June (because clearly the Fed couldn’t possibly forecast snow in the winter), and three months later is now 2.0%-2.2%.
In short, a 43% forecasting error. That is all.
The medium term indicators are leaning towards the hold side at the closing and the short-term market direction meter is bullish. We remain mostly, at best, neutral and conservatively holding. The important DMA’s, volume and a host of other studies have not turned significantly and that is not enough for me to start shorting, but now I am getting very concerned. The SP500 MACD has turned down, but remains above zero at +7.42. 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 70 % Bearish and it seems to be a good sign for being bullish. The ‘Sheeples’ always seem to get it wrong.
StockChart.com 10 Year Treasury Note Yield Index ($TNX) is at 26.00. (Chart Here) Treasury Yield Curve Approaches Flattest Since 2009.
StockChart.com Overbought / Oversold Index ($NYMO) is at -40.56. (Chart Here) But anything below -30 / -40 is a concern of going deeper. Oversold conditions on the NYSE McClellan Oscillator usually bounce back at anything over -50 and reverse after reaching +40 oversold.
Chris Ciovacco says, “As long as the consumer discretionary ETF (NYSEARCA:XLY) holds above [66.88], all things being equal, it is a good sign for stocks and the U.S. economy.” 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 was a signal that we might have another reversal as were are witnessing.
The DOW at 4:00 is at 25 up 17 or 0.15%.
The SP500 is at 2001.57 up 2.59 or 0.13%.
SPY is at 200.81 up 0.27 or 0.13%.
The $RUT is at 1154 up 3 or 0.25%.
NASDAQ is at 4562 up 9 or 0.21%.
NASDAQ 100 is at 4074 up 6 or 0.15%.
$VIX ‘Fear Index’ is at 12.62 down 0.11 or -0.86%. Neutral to Bullish Movement
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The longer trend is up, the past months trend is net positive, the past 5 sessions have been negative and the current bias is flat and descending.
WTI oil is trading between 94.00 (resistance) and 92.73 (support) today. The session bias is volatile, trending sideways and is currently trading down at 92.94. (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)
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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 fell from 1239.91 earlier to 1222.82 and is currently trading up at 1224.20. The current intra-session trend is negative and volatile. (Chart Here)
Dr. Copper is at 3.135 falling from 3.154 earlier. (Chart Here)
The US dollar is trading between 84.84 and 84.07 and is currently trading up at 84.75, the bias is currently positive. (Chart Here) >>>> There is a gap below between 83.92 and 83.79, watch out below as any rise is expected to be temporary.<<<<<<
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