Market Commentary: Markets Close Mixed, Sideways Trading All Afternoon

Written by Gary

The averages have closed all over the place. The DOW closed flat and in the red while the small caps closed fractionally higher in the green. Volume was low for most of the afternoon with some moderate trading at the close.

By 4 pm the averages looked weak and uninspiring as we suspected would be the case as we move towards the holiday on Thursday.

Our medium term indicators are leaning towards sell portfolio of non-performersat the close and the short-term market direction meter is Very, very Bearish moving from just very bearish this afternoon. 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 flat, but remains abovezero at 25.50. 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 65 % Bearish (falling from 70% and now rising from 33%).

Investors Intelligence sets the breath at 55.7 % bullish with the status at BearCorrection. I expect a market reversal at or before ~25.0 should the markets start to descend.

StockChart.com Overbought / Oversold Index ($NYMO) is at 30.39. 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.

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