Market Commentary: Averages Close Up Nicely, European Worries May Be A Problem

Written by Gary

At a cursory glance at today's session it would appear all is well with the US market place and the near 10% correction that ended last Wednesday is all but over. Unfortunately that may not be the case, read more below.

At the 4 pm closing bell, the averages were up very nicely, some exceeding 2.5% including the DOW up over 1.2%. The real action may not have happened yet as mounting EU worries continue to smother the bears.

Trouble in the European markets can spell trouble in the USA markets as well and there appears to be a bunch of problems across the 'Pond'. We have written for years that the financial cracks that have been papered over on Europe's financial walls are getting larger and much more transparent. US investors are looking for stability in the EU; having seen none lately, they remain nervous.

What Mr. Goette says below is true regarding 'multi-day upmoves', but that they have to be solid moves NOT HFT algo computer generated like in today's session. What we have here is the ' highly volatile phase of attempting to bottom' that will come back and bite the current lot of bulls in the arse.

Another area of concern, just one of many, are the gaps the NASDAQ has left on it bullish push. Gaps like to be closed, sooner rather than later and in this case another decline could be realized soon adding to already bearish predictions being touted by many analysts.

This chart clearly shows the support and gaps on this NASDAQ daily chart. The red trend line is the 100 DMA, orange = 145 DMA and the purple is the 200 DMA. In light of the HFT computer trading today this sessions rise is NOT a confirmation of a continuing bull run. In fact I think the markets could very well begin contracting starting tomorrow. The ($NYMO) oversold index is in positive territory and savvy investors are seriously looking to short long positions. Look at the chart and tell what you think.

Here the StockTiming.com points out what the Inflowing Liquidity levels are showing and it is not a pretty picture. There are so many stats out there pointing towards more 'correction' that it would be wise to play your cards closely to your chest.

Our medium term indicators are leaning towards sell portfolio of non-performersat the close and the short-term market direction meter is bullish. We remain mostly, at best, negative and conservatively bullish. The important DMA's, volume and a host of other studies have now turned and may be enough for some to start shorting. Right now now I am getting very concerned the current downtrend will get more aggressive in the short-term and volatility may promote sudden reversals. The SP500 MACD has turned up, but remains below zero at -22.49. 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.

Investing.com members' sentiments are 40 % Bearish (falling from 70% and now rising from 33%) and it seems to be a good sign for being bearish. The 'Sheeples' always seem to get it wrong.

Investors Intelligence sets the breath at 38.6 % bullish with the status at BearConfirmed. (Chart Here ) I expect a market reversal at or before ~25.0.

StockChart.com NYSE Bullish Percent Index ($BPNYA) is at 41.44. (Chart Here) Below support zone but rising. Next stop was ~57, then ~44, below that is where we will most likely see the markets crash. We are seriously below 44 and need a reversal pronto as it looks like there is nothing to stop the fall until 25 and taking the markets with it.

StockChart.com S&P 500 Bullish Percent Index ($BPSPX) is at 43.20. (Chart Here) In support zone and rising. ~62, ~57, ~45 at which the markets are in a full-blown correction. The next stop now is ~37.00.

StockChart.com 10 Year Treasury Note Yield Index ($TNX) is at 22.08. (Chart Here)

Spinning top possible reversal indicator.

StockChart.com Overbought / Oversold Index ($NYMO) is at +35.77. (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. (Now were in good shape to descend again - watch out!)

StockChart.com Consumer Discretionary ETF (XLY) is at 66.06. (Chart Here)

StockChart.com NYSE % of stocks above 200 DMA Index ($NYA200R) is at38.55 %. (Chart Here) The downside decent has reversed, but will it continue to rise? The next support is ~37.00, ~25.00 and ~15.00 below that. December, 2012 was the last time we saw numbers this low.

StockChart.com NYSE Composite (Liquidity) Index ($NYA) is at 10498. (Chart Here) We are well above the resistance (10,301) but is this still a test, stay tuned. Next stop is 9750, then 9250, and 8500.

The DOW at 4:00 is at 16615 up 215 or 1.31%.

The SP500 is at 1941 up 37 or 1.96%.

SPY is at 194.23 up 4 or 1.98%.

The $RUT is at 1113 up 18 or 1.63%.

NASDAQ is at 4419 up 103 or 2.40%.

NASDAQ 100 is at 3971 up 101 or 2.62%.

$VIX 'Fear Index' is at 16.26 down 2.31 or -12.44%. Neutral Movement

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

WTI oil is trading between 83.24 (resistance) and 81.59 (support) today. The session bias is neutral, very volatile and is currently trading down at 82.47. (Chart Here)

Acording to Rob Kurzatkowski, Senior Commodity Analyst at OptionsExpress.com, ". . . we see the December Crude Oil contract holding above the $80 level. To this point, the contract has held up at this technical support level. More stout support can be found around the $75 mark, should Oil fail to hold $80. The result of recent price weakness has been oversold technical levels. The 14-day RSI is in the mid-teens, which could be supportive of prices in the near term. In order to gain some traction,Crude Oil prices may need to post several closes north of the $85 mark."

Brent Crude is trading between 86.47 (resistance) and 85.20 (support) today. The session bias is elevated, very volatile and is currently trading down at 86.22.(Chart Here)

Gold rose from 1246.05 earlier to 1255.57 and is currently trading up at 1248.02The current intra-session trend is trending lower and volatile. (Chart Here)

Dr. Copper is at 3.030 rising from 2.974 earlier. (Chart Here)

The US dollar is trading between 85.46 and 84.79 and is currently trading up at85.45, the bias is currently positive. (Chart Here) Resistance made in Aug., 2013 (~85.00) has been broken and now is support. (Which has been tested and failed 2 times.)

Real Time Market Numbers