Written by Gary
Midday Market Commentary For 10-10-2014
Averages are down, large caps are flat and the small caps are still showing losses over one percent as volume moves from moderate to low.
By noon future direction was unsure although a reverse direction spinning top candlestick has formed as we watch the large caps melt up.
Our medium term indicators are leaning towards the hold to lighten portfolio of non-performers at the midday and the short-term market direction meter has moved from very, very bearish to just very bearish. We remain mostly, at best, slightly negative and conservatively bullish. 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 current downtrend will get more aggressive. The SP500 MACD has turned down, but remains below zero at -12.79. 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 strategy.
Investing.com members’ sentiments are 48 % Bearish (falling from 70%) and it seems to be a good sign for being bearish. The ‘Sheeples’ always seem to get it wrong – just saying!.
StockChart.com NYSE Bullish Percent Index ($BPNYA) is at 47.61. (Chart Here) Below support zone and apparently going further down. Next stop was ~57 and now it is ~44, below that is where we will most likely see the markets crash.
StockChart.com 10 Year Treasury Note Yield Index ($TNX) is at 23.09. (Chart Here) Treasury Yield Curve Approaches Flattest Since 2009.
StockChart.com Overbought / Oversold Index ($NYMO) is at -41.30. (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 65.00 (and staying there) should be of a great concern to bullish investors.
This $NYA200R chart below is the percentage of stocks above the 200 DMA and is always a good statistic to follow. It can depict a trend of declining equities which is always troubling, especially when it drops below 60% – 55%. Dropping below 40%-35% signals serious continuing weakness and falling averages.
Today it represents the lowest levels seen since the beginning of the October, 2011 rally. Eric Parnell says, ‘ If nothing else, given that relatively fewer stocks are trading above their 200-day moving average at a time when the market is just off of its all-time highs suggests that an increasingly narrowing group of stocks is driving the rally at this stage, which does not bode well for the future sustainability of the uptrend.” It also strongly suggests there has been a ‘stealth bear market’ underway in recent months.
StockChart.com NYSE % of stocks above 200 DMA Index ($NYA200R) is at 38.22 %. (Chart Here) Unless this downward trend reverses itself soon, we are going to see further downside. The next support is ~37.00 and ~25.00 below that.
The DOW at 12:00 is at 16667 up 11 or 0.06%.
The SP500 is at 1923 down 5 or -0.25%.
SPY is at 192.30 down 0.45 or -0.23%.
The $RUT is at 1065 down 3 or -0.24%.
NASDAQ is at 4333 down 45 or -1.03%.
NASDAQ 100 is at 3927 down 41 or -1.02%.
$VIX ‘Fear Index’ is at 19.08 up 0.32 or 1.65%. Neutral to bullish Movement
(Follow Real Time Market Averages at end of this article)
The longer trend is up, the past months trend is negative, the past 5 sessions have been negative and the current bias is negative, trending up.
WTI oil is trading between 85.90 (resistance) and 83.60 (support) today. The session bias is positive and is currently trading up at 85.77. (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 1217.70 earlier to 1225.81, then fell and is currently trading down at 1223.10. The current intra-session trend is neutral and volatile. (Chart Here)
Dr. Copper is at 3.020 falling from 3.029 earlier. (Chart Here)
The US dollar is trading between 86.09 and 85.52 and is currently trading up at 85.94, the bias is currently positive and volatile. (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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Written by Gary