Written by Gary
The averages were headed for a ‘down session’ until out of the blue the markets went crazy on the rumor that a peace deal in Ukraine or maybe a deal in Greece was made and shot up like a sky rocket. (read more below) Either way, this is not going to last.
By 4 pm only the large caps remained in the red and unchanged. The small caps were up +0.3% and it looked like just about any other trading day.
If you can believe it, stocks jumped up within an hour after Merkel, Hollande, Poroshenko, and Putin got together to drink tea in Minsk so reports ZeroHedge. This bond action chart is representative of the equity markets as well. Now you know, except I wouldn’t place any of my cash behind this, should I say, bull sh. ., I mean bull trap! Buy the rumor sheeples!
The other alternative is that Greece made a deal.
Greece Said to Offer Euro Area Four Principles for Talks
(Bloomberg) — Greek Finance Minister Yanis Varoufakis presented his European counterparts with four principles for a new financing deal, according to two euro-area officials, as Greece battles to stave off a cash crunch and stay in the currency bloc.
Greece wants a deal that provides for financial stability, financial sustainability and debt restructuring, while addressing Greece’s humanitarian crisis, Varoufakis said during talks Wednesday in Brussels without offering details, according to the officials, who asked not to be named because the talks are private.
Our medium term indicators are leaning towards sell portfolio of non-performers at the midday and the session market direction meter (for day traders) is 42 % Bearish (and rising). We remain mostly conservatively bullish, but with a bearish slant. I am very concerned any downtrend could get very aggressive in the short-term and any volatility may also promote sudden reversals that will only please the day traders. The SP500 MACD has turned up, but remains above zero at +0.06 down from +5.68. I would advise caution in taking any position during this 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 see some leading indicators that are warning of a ‘long-term’ reversal within six months. I believe one is most likely to occur 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 51 % Bearish.
CNN’s Fear & Greed Index is 56. Above 50 = greed, below 50 = fear. (At ‘Greed‘) (Chart Here) The number of stocks hitting 52-week highs exceeds the number hitting lows and is at the upper end of its range, indicating extreme greed.
Investors Intelligence sets the breath at 56.6 % 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 +8.08. (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 54.10 %. (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.
These are not ‘leading’ indicators as such, but depicting ‘trends’ in the making showing data accumulated over the past several months and needs to be watched.
StockChart.com NYSE Bullish Percent Index ($BPNYA) is at 60.91. (Chart Here) Next stop down is ~57, then ~44, below that is where we will most likely see the markets crash.
StockChart.com S&P 500 Bullish Percent Index ($BPSPX) is at 68.80. (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 ($TNX) is at 19.88. (Chart Here) The Stock Market Is Just Noticing What The Bond Market Has Known For Months The all time low is 13.94 (11-2012).
StockChart.com Consumer Discretionary ETF (XLY) is at 73.57. (Chart Here)
Chris Ciovacco says, “As long as the consumer discretionary ETF (NYSEARCA:XLY) holds above [66.88], all things being equal, it is a good sign for stocks and the U.S. economy.” This chart clearly shows that dropping below 65.00 / 62.75 (and staying there) should be of a great concern to bullish investors.
StockChart.com NYSE Composite (Liquidity) Index ($NYA) is at 10,885. (Chart Here) Markets move inverse to institutional selling and this NYA Index is followed by Institutional Investors. It is a very important index for investors to watch. We are above the support (10,301) but is this a test of the next resistance (triple top) at ~11,000 to 11,108, watch to see if these numbers decline back down. Next support down is 10600, 9750, then 9250, and 8500.
The DOW at 4:00 is at 17862 down 7 or -0.04%. (Historical High 18,103.45)
The SP500 is at 2069 down 0.06 or -0.00%. (Historical High 2,093.55)
SPY is at 207.09 up 0.12 or 0.06%.
The $RUT is at 1202 up 0.12 or 0.06%.
Don’t Invest In The Russell 2000
NASDAQ is at 4801 up 14 or 0.28%. (Historical High 5132.52)
NASDAQ 100 is at 4297 up 16 or 0.38%.
How the Popular ‘VIX’ Gauge Works
$VIX ‘Fear Index’ is at 16.96 down 0.27 or -1.57%. Bullish to Neutral Movement
(Follow Real Time Market Averages at end of this article)
The longer trend is up, the past months trend is neutral, the past 5 sessions have been net positive and the current bias is mixed, trending up.
Citi: Oil Could Plunge to $20, and This Might Be ‘the End of OPEC’
The recent surge in oil prices is just a “head-fake,” and oil as cheap as $20 a barrel may soon be on the way, Citigroup said in a report . . . Despite global declines in spending that have driven up oil prices in recent weeks, oil production in the U.S. is still rising, wrote Edward Morse, Citigroup’s global head of commodity research. Brazil and Russia are pumping oil at record levels, and Saudi Arabia, Iraq and Iran have been fighting to maintain their market share by cutting prices to Asia. The market is oversupplied, and storage tanks are topping out. Read More >>
WTI oil is trading between 50.72 (resistance) and 48.10 (support) today. The support currently is ~46.70 and the next resistance is ~54.00. The Iranians say they are comfortable with $25 and I’ll bet the Saudi’s will do everything possible to make it painful for them, meaning much lower prices to come. The session bias is trending sideways and is currently trading up at 49.39. (Chart Here)
Brent Crude is trading between 58.10 (resistance) and 55.19 (support) today. The support currently is ~50.40 and the next resistance is ~60.00. The session bias is trending sideways and is currently trading up at 56.38. (Chart Here)
Citi reduced its annual forecast for Brent crude for the second time in 2015. Prices in the $45-$55 range are unsustainable and will trigger “disinvestment from oil” and a fourth-quarter rebound to $75 a barrel, according to the report.
Prices this year will likely average $54 a barrel.
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 1238.74 earlier to 1220.79 and is currently trading up at 1218.40. The current intra-session trend is negative and sideways. (Chart Here)
Dr. Copper in Need of Some Medicine?
Dr. Copper is at 2.542 falling from 2.583 earlier. (Chart Here)
The Consequences Of A Strengthening U.S. Dollar
Will 2015 be the Year of the Greenback?
The US dollar is trading between 95.23 (highest since 2003 and ~92 is a very substantial support with 92.53 representing a triple top that has been broken) and 94.79. U.S. dollar is currently trading down at 95.15, the bias is currently elevated, sideways 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 level of ~92 is the current support and is substantial. The ~94.25 area appears to be a minor resistance for those interested. Historical chart Here.
The markets are still susceptible to climbing on ‘Bernankellen’ vapor, use caution!
“Investors should Hinge Kir Businessremember 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
If you would like to get advanced buy/sell tweets, sign-up in the column to the right of this post by clicking on the ‘Follow‘ button. Write me with suggestions and I promise not to bite.
Real Time Market Numbers
To contact me with questions, comments or constructive criticism is always encouraged and appreciated:
Written by Gary
Leave a Reply