Market Commentary: Markets Closed Quietly, New Closing Highs On Large Caps

Written by Gary

Markets remained in the green and the DOW sea-sawed back and forth across the unchanged line remaining mostly flat. The small caps melted higher while the SP500 traded sideways in a narrow four point range all day on sometimes anemic volume.

By 4 pm the SP500 and DOW closed on new closing highs and the $RUT closed up over 1.1%. Relatively speaking, it has been a quiet day on Wall Street and expect it will become slower by the close of Wednesday.

As of the closing, there are no technical indicators that would signal an imminent decent. If anything we expect the markets to modestly melt up to squeeze out new highs or continue trading sideways this week.

Our medium term indicators are leaning towards sell portfolio of non-performersat the close and the short-term market direction meter is bearish, down from neutral midday and 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 flat, but remains abovezero at 25.56. 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. members' sentiments are 66 % Bearish (falling from 70% and now rising from 33%).

Investors Intelligence sets the breath at 54.9 % bullish with the status at BearCorrection. I expect a market reversal at or before ~25.0 should the markets start to descend. Overbought / Oversold Index ($NYMO) is at 23.77. 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 $NYA200R chart below is the percentage of stocks above the 200 DMA and is always a good statistic to follow. It can depict a trend of declining equities which is always troubling, especially when it drops below 60% - 55%. Dropping below 40%-35% signals serious continuing weakness and falling averages. NYSE % of stocks above 200 DMA Index ($NYA200R) is at 58.48 %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. NYSE Bullish Percent Index ($BPNYA) is at 60.50. Next stop down is ~57, then ~44, below that is where we will most likely see the markets crash. S&P 500 Bullish Percent Index ($BPSPX) is at 74.20. In support zone and rising. ~62, ~57, ~45 at which the markets are in a full-blown correction. 10 Year Treasury Note Yield Index ($TNX) is at 23.10. Consumer Discretionary ETF (XLY) is at 70.74

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. NYSE Composite (Liquidity) Index ($NYA) is at 11037. We are above the resistance (10,301) but is this a test of the next resistance at ~10600/900, watch to see if these numbers decline back down. If they don't then there an excellent possibility for the markets going higher now that we have topped 10900. Next stop down is 10600, 9750, then 9250, and 8500.

The DOW at 4:00 is at 17817.90 up 8 or 0.04%. (Historical High 17,894.83)

The SP500 is at 2069.41 up 6 or 0.29%. (Historical High 2,071.46)

SPY is at 207.28 up 0.58 or 0.28%.

The $RUT is at 1187 up 15 or 1.24%.

NASDAQ is at 4755 up 42 or 0.89%. (Historical High 5132.52)

NASDAQ 100 is at 4284 up 33 or 0.78%.

$VIX 'Fear Index' is at 12.65 down 0.25 or -1.94%Bullish to neutral Movement

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

WTI oil is trading between 76.99 (resistance) and 75.53 (support) today. The session bias is negative and is currently trading up at 75.75

Brent Crude is trading between 80.84 (resistance) and 79.51 (support) today. The session bias is negative and is currently trading up at 79.58.

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 1204.41 earlier to 1192.86 and is currently trading down at 1197.70. The current intra-session trend is neutral

Dr. Copper is at 3.001 falling from 3.045 earlier. 

The US dollar is trading between 88.51 (highest since 2009) and 88.14 and is currently trading down at 88.19, the bias is currently trending down. 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.

"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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