Written by Gary
Midday Market Commentary For 10-03-2014
Markets have muddled their way elevated, sideways in a very narrow trading range since this mornings opening. The DOW is still at triple digits and the volume has reached anemic status.
By noon many analysts are commenting that another down session is probable to even out today’s rise. For now the bear is sleeping.
The on-going prospect of a sideways market is the most likely sceniaro for the next few sessions.
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 below zero at -6.33. 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 64 % Bearish and it seems to be a good sign for being bullish. The ‘Sheeples’ always seem to get it wrong. Now they are moving towards the bullish side which is interesting.
StockChart.com NYSE Bullish Percent Index ($BPNYA) is at 53.17. (Chart Here) Below support zone and apparently going further down. Next stop was ~57 and now it is ~44, below that is where we will most likely see the markets crash.
StockChart.com 10 Year Treasury Note Yield Index ($TNX) is at 24.57. (Chart Here) Treasury Yield Curve Approaches Flattest Since 2009.
StockChart.com Overbought / Oversold Index ($NYMO) is at -53.47. (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.
This $NYA200R chart below is the percentage of stocks above the 200 DMA and is always a good statistic to follow. It can depict a trend of declining equities which is always troubling, especially when it drops below 60% – 55%. Dropping below 40%-35% signals serious continuing weakness and falling averages.
Today it represents the lowest levels seen since the beginning of the October, 2011 rally. Eric Parnell says, ‘ If nothing else, given that relatively fewer stocks are trading above their 200-day moving average at a time when the market is just off of its all-time highs suggests that an increasingly narrowing group of stocks is driving the rally at this stage, which does not bode well for the future sustainability of the uptrend.” It also strongly suggests there has been a ‘stealth bear market’ underway in recent months.
The DOW at 12:15 is at 16961 up 160 or 0.95%.
The SP500 is at 1965 up 19 or 0.98%.
SPY is at 196.34 up 2 or 1.01%.
The $RUT is at 1109 up 12 or 1.13%.
NASDAQ is at 4479 up 49 or 1.11%.
NASDAQ 100 is at 4028 up 42 or 1.06%.
$VIX ‘Fear Index’ is at 14.68 down 1.48 or -9.16%. Neutral Movement
(Follow Real Time Market Averages at end of this article)
The longer trend is up, the past months trend is net negative, the past 5 sessions have been negative and the current bias is elevated, but trading sideways quietly.
WTI oil is trading between 91.78 (resistance) and 89.39 (support) today. The session bias is negative and is currently trading up at 89.37. (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 1215.90 earlier to 1191.49 and is currently trading up at 1193.00. The current intra-session trend is negative. (Chart Here)
Dr. Copper is at 2.999 falling from 3.016 earlier. (Chart Here)
The US dollar is trading between 86.86 and 85.53 and is currently trading up at 86.78, the bias is currently 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