Market Commentary: Markets Remain Depressed, DOW Down -1%, $RUT Up Fractionally

Written by Gary

Midday Market Commentary For 12-09-2014

The averages have remained in the ‘serious’ bearish position all morning session, sea-sawing with a fractional trending up wards. The $RUT is the first to reach green and might close that way.

By 12 pm the DOW was stuck down 1% trading sideways while the other majors were melting up fractionally, but also down -0.6%. The prospects of the markets closing in the green are remote today.

Our medium term indicators are leaning towards sell portfolio of non-performers at the midday and the short-term market direction meter is bearish moving from fractionally bearish this morning. We remain mostly conservatively bullish, neutral in other words. Right now now I am getting very concerned any downtrend could get very aggressive in the short-term and any volatility may also promote sudden reversals. The SP500 MACD has turned down, but remains above zero at 16.43. I would advise caution in taking any position during this uncertain period and I hope you have returned your ‘dogs’ to the pound.

Having some cash on hand now is not a bad strategy as market changes are happening everyday. As of now, I do not see any leading indicators that are warning of a ‘long-term’ reversal in the near-term. There may be one later in 2015, but any market fluctuations we see now are more of a internal market rectification than a bear market.

Investing.com members’ sentiments are 64 % Bearish.

Investors Intelligence sets the breath at 54.5 % bullish with the status at Bear Correction. (Chart Here ) I expect a market reversal at or before ~25.0 should the markets start to descend.

StockChart.com Overbought / Oversold Index ($NYMO) is at -29.20. (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.

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.

StockChart.com NYSE % of stocks above 200 DMA Index ($NYA200R) is at 51.35 %. (Chart Here) The next support is ~37.00, ~25.00 and ~15.00 below that. December, 2011 was the last time we saw numbers in the 20’s.

Many indicators are showing markets leveling off or rounding indicating market softness that could lead to lower values and investor’s should watch carefully. The SP500 MACD, $BPNYA, $BPSPX, $TNX and the $NYA all show rounding off the tops which in the past has lead to a downturn.

StockChart.com NYSE Bullish Percent Index ($BPNYA) is at 58.91. (Chart Here) Next stop down is ~57, then ~44, below that is where we will most likely see the markets crash.

StockChart.com S&P 500 Bullish Percent Index ($BPSPX) is at 75.20. (Chart Here) In support zone and rising. ~62, ~57, ~45 at which the markets are in a full-blown correction.

StockChart.com 10 Year Treasury Note Yield Index ($TNX) is at 22.02. (Chart Here) Flattening Yield Curve Signaling Slowing Economic Growth?

StockChart.com Consumer Discretionary ETF (XLY) is at 70.27. (Chart Here)

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 / 62.75 (and staying there) should be of a great concern to bullish investors.

StockChart.com NYSE Composite (Liquidity) Index ($NYA) is at 10,776. (Chart Here) Markets move inverse to institutional selling. We are above the resistance (10,301) but is this a test of the next resistance (triple top) at ~11,109, watch to see if these numbers decline back down. Next stop down is 10600, 9750, then 9250, and 8500.

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The DOW at 12:00 is at 17674 down 178 or -1.00%. (Historical High 17,991.19)

The SP500 is at 2043 down 17 or -0.84%. (Historical High 2,079.47)

SPY is at 204.86 down 2 or -0.85%.

The $RUT is at 1167 up 0.50 or 0.04%.

NASDAQ is at 4713 down 26 or -0.55%. (Historical High 5132.52)

NASDAQ 100 is at 4253 down 25 or -0.59%.

How the Popular ‘VIX’ Gauge Works

$VIX ‘Fear Index’ is at 15.97 up 1.76 or 12.46%. Bearish to neutral Movement

(Follow Real Time Market Averages at end of this article)

The longer trend is up, the past months trend is up, the past 5 sessions have been net positive and the current bias is negative.

Gundlach: Rates not going anywhere; oil headed lower

A believer in the shale boom, Goldman cuts oil price forecasts –

WTI oil is trading between 64.08 (resistance) and 62.29 (support) today. The session bias is elevated, volatile and is currently trading down at 63.69. (Chart Here)

Brent Crude is trading between 67.00 (resistance) and 65.29 (support) today. The session bias is elevated, volatile and is currently trading up at 66.78. (Chart Here)

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 1199.52 earlier to 1233.68 and is currently trading up at 1231.30. The current intra-session trend is positive. (Chart Here)

Can Dr. Copper Heal Thyself

Dr. Copper is at 2.931 rising from 2.865 earlier. (Chart Here)

The Consequences Of A Strengthening U.S. Dollar

The US dollar is trading between 89.28 (highest since 2009) and 88.15 and is currently trading down at 88.44, the bias is currently negative and volatile. (Chart Here) Resistance made in Aug., 2013 (~85.00) has been broken and now is support. This support has gotten much stronger since August, 2014 and isn’t likely to fall easily. The next resistance/support ??? is at ~88.72 set in June, 2010.

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