Market Commentary: Averages Seek Lower Levels As Volume Falls

Written by Gary

Shortly after publishing the morning commentary the averages started a slow decent to the -0.8% range with many heavy red spikes in the volume.

By the noon hour the averages were very much in the red, sea-sawing basically trading sideways in narrow range as volume continues to fall.

One down day does not make a trend, but we need to pay attention to short-term market direction as analysts are expecting a small downturn before a Santa Claus rally can become a reality. The $NYMO is at levels not seen in a long time and I normally would expect a correction to began at any time when it reached these levels.

Lots of indicators, but none expressly points in one direction leaving investors nervous. Lot's of forecasts and movement scenarios, but just about every one was never on the money, so use caution.

Our medium term indicators are leaning towards sell portfolio of non-performersat the midday and the short-term market direction meter has moved from verybearish to VERY BEARISH. We remain mostly, at best, negative and conservatively bullish, neutral in other words. 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 any downtrend could get more aggressive in the short-term and volatility may also promote sudden reversals. The SP500 MACD has turned up, but remains above zero at 15.06. 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 56 % 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 49.1 % bullish with the status at BearCorrection. (Chart Here ) I expect a market reversal at or before ~25.0 should the direction continue to descend.

StockChart.com Overbought / Oversold Index ($NYMO) is at 71.67. (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 are high enough to descend again - watch out!)

StockChart.com NYSE % of stocks above 200 DMA Index ($NYA200R) is at56.34 %. (Chart Here) The downside decent has reversed, but will it continue to rise above 50%? 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 52.07. (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 61.60. (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 23.25. (Chart Here)

StockChart.com Consumer Discretionary ETF (XLY) is at 67.09. (Chart Here)

StockChart.com NYSE Composite (Liquidity) Index ($NYA) is at 10,718. (Chart Here) We are above the resistance (10,301) but is this a test of the next resistance at ~10600/700, 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 10800. Next stop down is 10600, 9750, then 9250, and 8500.

The DOW at 12:00 is at 17351 down 15 or 0.09%.

The SP500 is at 2008 down 10 or -0.49%.

SPY is at 200.77 down 1 or -0.50%.

The $RUT is at 1164 down 6 or -0.55%.

NASDAQ is at 4608 down 31 or -0.66%.

NASDAQ 100 is at 4140 down 29 or -0.70%.

$VIX 'Fear Index' is at 15.26 up 0.53 or 3.60%. Bearish to Neutral Movement

The longer trend is up, the past months trend is net positive, the past 5 sessions have been positive and the current bias is negative and trending higher.

WTI oil is trading between 78.43 (resistance) and 75.93 (support) today. The session bias is trending down and is currently trading up at 76.46. (Chart Here)

Brent Crude is trading between 84.44 (resistance) and 82.10 (support) today. The session bias is trending sideways and is currently trading up at 82.61. (Chart Here)

Gold fell from 1174.06 earlier to 1165.58 and is currently trading down at 1167.90. The current intra-session trend is neutral and volatile. (Chart Here)

Dr. Copper is at 3.016 falling from 3.073 earlier. (Chart Here)

The US dollar is trading between 87.49 and 86.98 and is currently trading up at 87.16, 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.

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