Written by Gary
Closing Market Commentary For 10-07-2014
At 2 pm the averages started sliding and never recovered as trading increased marginally. The SP500 stopped short of the 145 DMA and the DOW closed below the 145 DMA. The $RUT is down over 7% for 2014 and the small caps were slammed.
By 4 pm the markets were looking really tired, but I suspect the markets will put in a green day tomorrow before it looks to descend again. The bear has spoken!
European worries build as Investors sell US equities on negative outlook on the IMF.
Red Ink Returns: U.S. equities saw sharp losses, which accelerated into the last hour of trade on Tuesday, as worries over international growth were reignited and as traders fretted ahead of third-quarter earnings season.
The medium term indicators are leaning towards the hold to lighten portfolio of non-performers at the close and the short-term market direction meter is very bearish. We remain mostly, at best, neutral but now slightly negative and conservatively negative. The important DMA’s, volume and a host of other studies have are now turning and that is still not enough for me to start shorting, but now I am getting very concerned. The SP500 MACD has turned down, but remains below zero at -8.94. I would advise caution in taking any position during this uncertain period except to return your ‘dogs’ to the pound. Having some cash on hand now is not a bad stratagy.
Investing.com members’ sentiments are 51 % Bearish (falling from 70%) and it seems to be a good sign for being bearish. The ‘Sheeples’ always seem to get it wrong.
StockChart.com NYSE Bullish Percent Index ($BPNYA) is at 52.27. (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 ($TNX) is at 23.60. (Chart Here) Treasury Yield Curve Approaches Flattest Since 2009.
StockChart.com Overbought / Oversold Index ($NYMO) is at -23.34. (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 (and staying there) 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 4:00 is at 16719 down 273 or -160%.
The SP500 is at 1935 down 30 or -1.51%.
SPY is at 193.09 down 3 or -1.54%.
The $RUT is at 1076 down 18 or -1.68%.
NASDAQ is at 4385 down 70 or -1.56%.
NASDAQ 100 is at 3959 down 58 or -1.44%.
$VIX ‘Fear Index’ is at 17.20 up 1.74 or 11.25%. Bearish 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 net negative and the current bias is down trading sideways.
WTI oil is trading between 90.56 (resistance) and 88.56 (support) today. The session bias is negative and is currently trading down at 88.56. (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 and then fell and rose again from 1203.51 earlier to 1213.68 and is currently trading down at 1209.40. The current intra-session trend is neutral, but volatile. (Chart Here)
Dr. Copper is at 3.033 falling from 3.043 earlier. (Chart Here)
The US dollar is trading between 86.21 and 85.66 and is currently trading down at 85.74, the bias is currently neutral and trending down. (Chart Here) Resistance made in Aug., 2013 (85.00) 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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Real Time Market Numbers
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Written by Gary