Market Commentary: Averages Trade Sideways, WTI Oil Falls Below $50, DOW Closes Down 331
Written by Gary
Oil stopped falling in the early part of the afternoon session and so did the equities. WTI oil has remained below 51 since it touched 50.02 earlier in the session and then went below 50 at 2:30 this afternoon. Current wisdom indicates we have NOT seen the last decline.
By 4 pm the session remained down and traded sideways until the close. The 'oils' and disruptive issues in Europe and Greece are driving the markets and further downside is expected, however, the upside trend has not been breached - yet!
Some thoughts of manipulation are making a buzz around the analyst arm chairs in that the oils are going to be pushed higher before resuming the downward trend again. An interesting trading prospect if you are quick on the buy sell buttons.
Our medium term indicators are leaning towards sell portfolio of non-performers at the close and the session market direction meter is 100+ % bearish. We remain mostly conservatively bullish (even now), neutral in other words. Right now now I am getting very concerned any downtrend (like this one) 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 +6.29. 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 warnings 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 48 % Bearish.
Investors Intelligence sets the breath at 54.9 % bullish with the status at BearConfirmed. (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 +6.13. (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.
StockChart.com NYSE % of stocks above 200 DMA Index ($NYA200R) is at52.76 %. (Chart Here) The next support is ~37.00, ~25.00 and ~15.00 below that. December, 2011 was the last time we saw numbers in the 20's.
StockChart.com NYSE Bullish Percent Index ($BPNYA) is at 59.24. (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 ($BPSPX) is at 74.00. (Chart Here) In support zone and rising. ~62, ~57, ~45 at which the markets are in a full-blown correction.
StockChart.com 10 Year Treasury Note Yield Index ($TNX) is at 20.39. (Chart Here)
StockChart.com Consumer Discretionary ETF (XLY) is at 70.26. (Chart Here)
StockChart.com NYSE Composite (Liquidity) Index ($NYA) is at 10,608. (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 ~11,900, watch to see if these numbers decline back down. Next stop down is 10600, 9750, then 9250, and 8500.
The DOW at 4:00 is at 17502 down 331 or -1.86%. (Historical High 18,103.45)
The SP500 is at 2021 down 38 or -1.83%. (Historical High 2,093.55)
SPY is at 201.96 down 3.71 or -1.81%.
The $RUT is at 1181 down 17 or -1.46%.
NASDAQ is at 4653 down 74 or -1.57%. (Historical High 5132.52)
NASDAQ 100 is at 4161 down 69 or -1.64%.
$VIX 'Fear Index' is at 19.92 up 2.13 or 11.97%. Neutral Movement
The longer trend is up, the past months trend is net positive, the past 5 sessions have been net negative and the current bias is negative and sideways.
WTI oil is trading between 52.09 (resistance) and 49.70 (support) today. The session bias is negative and is currently trading down at 49.88. (Chart Here) (~50 appears to have been a support and now a resistance.)
Brent Crude is trading between 55.85 (resistance) and 52.69 (support) today. The session bias is negative and is currently trading down at 52.98. (Chart Here)
Gold rose from 1186.80 earlier to 1207.35 and is currently trading up at 1206.30. The current intra-session trend is trending up. (Chart Here)
Dr. Copper is at 2.768 falling from 2.811 earlier. (Chart Here)
The US dollar is trading between 92.04 (highest since 2005 and ~91 is a very substantial resistance) and 91.56 and is currently trading up at 91.67, the bias is currently trending down. (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 current level (~91 / 92) is the resistance (substantial) and could be a triple top of sorts. Historical chart Here.
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i believe that the low oil price will lead to a economic boom for those that import oil. However, for those that export oil eg Russia, Iran and the Middle East they will fall on hard times. However the export countries have enjoyed a real boom recently as the oil price has been high - lets hope they made the most of their boom and not squandered the profits!