Written by Gary
Midday Commentary For 09-22-2014
US dollar testing resistance and not good news for equities if it rises above. Noonday markets remain depressed as the $RUUT completes the ‘Death Cross’ (See thumbnail below) and investors give up on the Fed, at least for the day.
By noon the market decent had slowed and trading was on a sideways trend on anemic volume as investors remained concerned.
The $RUT is the first major average to make the ‘Death Cross’ happen, watch closely for others to follow suit, IF in fact we have a prolonged soft spot emerging.
The narrative just a few short days ago was how ‘dovish’ the Fed was (despite their apparent hawkishness) and that clearly they would not act unless they were highly confident of future US economic growth (which they have shown almost perfect ineptitude in forecasting).
The savior of any weakness in this meme was ‘well the rest of the world will take up the money-printing mantle’… but that narrative broke this weekend.
Only The Dow (for now) is still holding gains post-FOMC with the Russell 2000 down over 2% since then having completed its ‘death cross’ today.
The medium term indicators are leaning towards the hold side at the midday and the short-term market direction meter is bearish. We remain mostly, at best, neutral and conservatively holding. The important DMA’s, volume and a host of other studies have not turned significantly and that is not enough for me to start shorting, but now I am getting very concerned. The SP500 MACD has turned flat, but remains above zero at 7.54. I would advise caution in taking any position during this uncertain period although some technical indicators have starting to turn bearish.
Investing.com members’ sentiments are 77 % Bearish and it seems to be a good sign for being bullish. The ‘Sheeples’ always seem to get it wrong.
StockChart.com 10 Year Treasury Note Yield Index ($TNX) is at 25.55. (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 12:15 is at 17202 down 78 or -0.45%.
The SP500 is at 1994 down 16 or -0.82%.
SPY is at 199.09 down 1.61 or -0.80%.
The $RUT is at 1129 down 17 or -1.52%.
NASDAQ is at 4520 down 60 or -1.309%.
NASDAQ 100 is at 4052 down 48 or -1.17%.
$VIX ‘Fear Index’ is at 13.86 up 1.75 or 14.452%. Bearish to Neutral Movement
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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 90.49 (support) today. The session bias is negative and is currently trading down at 90.60. (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 1220.76 and is currently trading up at 1215.20. The current intra-session trend is positive. (Chart Here)
Dr. Copper is at 3.041 falling from 3.085 earlier. (Chart Here)
The US dollar is trading between 84.97 and 84.64 and is currently trading down at 84.91, the bias is currently positive testing 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