Written by Gary
Closing Commentary For 09-22-2014
Afternoon averages drifted sideways, but Large caps remaining down -0.6% for almost the entire session.
By 4 pm the session ended quietly where it had been trading on low volume and the DOW off triple digits.
From what I can tell is that investors are perturbed about the $RUT’s 50 DMA crossing over the 200 DMA, something that hasn’t happened since July, 2012. This isn’t an unusual occurrence as when it does cross below, it crosses back within 60 days. Investors are looking for the 50 DMA to cross back up, but that isn’t likely to happen soon if the averages behave as they have done in similar soft spots like today.
We should see several down days before heading back up the ladder if previous sell-offs hold any weight. I do not think this is the start of the ‘expect’ 10% correction that has been talked to death lately. It may come, but not this week.
The medium term indicators are leaning towards the hold side at the close and the short-term market direction meter is bearish. We remain mostly, at best, neutral and conservatively holding. The important DMA’s, volume and a host of other studies have not turned significantly and that is not enough for me to start shorting, but now I am getting very concerned. The SP500 MACD has turned flat, but remains above zero at 7.65. I would advise caution in taking any position during this uncertain period although some technical indicators have starting to turn bearish.
Investing.com members’ sentiments are 75 % Bearish and it seems to be a good sign for being bullish. The ‘Sheeples’ always seem to get it wrong.
StockChart.com 10 Year Treasury Note Yield Index ($TNX) is at 25.66. (Chart Here) Treasury Yield Curve Approaches Flattest Since 2009.
StockChart.com Overbought / Oversold Index ($NYMO) is at -28.53. (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 17173 down 107 or -0.62%.
The SP500 is at 1994 down 16 or -0.80%.
SPY is at 199.06 down 1.55 or -0.77%.
The $RUT is at 1129 down 18 or -1.53%.
NASDAQ is at 4528 down 52 or -1.14%.
NASDAQ 100 is at 4061 down 39 or -0.95%.
$VIX ‘Fear Index’ is at 13.69 up 1.58 or 13.05%. 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 net positive and the current bias is negative and sideways.
WTI oil is trading between 91.92 (resistance) and 90.42 (support) today. The session bias is negative and is currently trading up at 90.86. (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 rose from 1208.96 earlier to 1220.96 and is currently trading up at 1216.00. The current intra-session trend is neutral. (Chart Here)
Dr. Copper is at 3.043 falling from 3.085 earlier. (Chart Here)
The US dollar is trading between 84.97 and 84.64 and is currently trading down at 84.80, the bias is currently positive backed off resistance (at 84.97). (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