Written by Gary
Opening Market Commentary For 09-30-2014
Premarket were up 0.2% indicating the market will open in the green. Markets did open up +0.2% and quickly started to melt downward to flat status after the Chicago Purchasing Manager came in BELOW the last report. Then a Big plunge in US Consumer Confidence reporting in at 86.0 down from 93.4 sent the markets down deeper.
By 10 am the averages were solidly in the red, but this might be a ‘morning thing’ and we can see green later this afternoon as investors hope this will make Ms. Yellen reinstate the QE.
Not that sure the Deutsche Bank guy’s are correct on their decision below as it is way too early along with too much ‘noise’ to make a market direction call now.
With all the talk about market divergences foretelling a crash, Deutsche Bank is taking a more positive tack by saying the next 5% stock market move will be to the upside.
In a note entitled “Catching a falling knife?” Deutsche Bank strategist David Bianco changed his tactical call for the S&P 500 Index SPX -0.26% to “up” from “uncertain” on the basis that Federal Reserve rate hikes will be gradual in the coming year.
The medium term indicators are leaning towards the hold side at the opening 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 down, but remains below zero at -0.55. 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 74 % Bearish and it seems to be a good sign for being bullish. The ‘Sheeples’ always seem to get it wrong.
StockChart.com NYSE Bullish Percent Index ($BPNYA) is at 58.79. (Chart Here) Below support zone and apparently going further down. Next stop ~57 and then ~44, below that is where we see the markets crash.
StockChart.com 10 Year Treasury Note Yield Index ($TNX) is at 24.97. (Chart Here) Treasury Yield Curve Approaches Flattest Since 2009.
StockChart.com Overbought / Oversold Index ($NYMO) is at -45.32. (Chart Here) But anything below -30 / -40 is a concern of going deeper. Oversold conditions on the NYSE McClellan Oscillator usually bounce back at anything over -50 and reverse after reaching +40 oversold.
Chris Ciovacco says, “As long as the consumer discretionary ETF (NYSEARCA:XLY) holds above [66.88], all things being equal, it is a good sign for stocks and the U.S. economy.” This chart clearly shows that dropping below 65.50 should be of a great concern to bullish investors.
StockChart.com NYSE % of stocks above 200 DMA Index ($NYA200R) is at 49.88 %. (Chart Here) Not a good sign when half of the equities on the NYSE is BELOW their 200 DMA. Unless this downward trend reverses itself soon, we are going to see further downside.
The DOW at 10:15 is at 17056 down 16 or -0.10%. (the Dow is only up 2.2% in 2014)
The SP500 is at 1975 down 2 or -0.13%.
SPY is at 197.32 down 0.22 or -0.11%.
The $RUT is at 1111 down 6 or -0.58%. (the Russell is now down -5.5% on the month and -4.5% on the year)
NASDAQ is at 4496 down 9 or -0.21%.
NASDAQ 100 is at 4045 down 2 or -0.06%.
$VIX ‘Fear Index’ is at 16.00 up 0.02 or 0.13%. 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 neutral, the past 5 sessions have been down and the current bias is negative.
WTI oil is trading between 94.90 (resistance) and 93.44 (support) today. The session bias is negative and is currently trading down at 93.50. (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 1205.01 earlier to 1220.51 and is currently trading down at 1216.50. The current intra-session trend is positive. (Chart Here)
Dr. Copper is at 3.024 falling from 3.060 earlier. (Chart Here)
The US dollar is trading between 86.34 and 85.62 and is currently trading down at 86.08, the bias is currently net positive. (Chart Here) Resistance made in Aug., 2013 has been broken.
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