Written by Gary
Premarkets were off -1.8% this morning and fared better at the opening by melting up fractionally to minimize losses. Analysts are looking for a short term bounce today or tomorrow to relieve oversold condition, I am not so sure that is going to happen.
By 10 am the large caps has melted up to a -0.5% and the small caps were still down over a full percentage point, but improving fractionally.
This is going to be a really nice correction making up for the 5 years were haven't had one and the BTFDers are going to go crazy and I can't blame them one bit. This is not the big decline, although it may seem like one, the big one will come possibly this time next year at the earliest followed by a recession.
Obviously impossible to put dates on anything further forward than tomorrow, there remains a very distinct possibility of a recession coming our way and you don't need a magic crystal ball to see it.
Our medium term indicators are leaning towards sell portfolio of non-performersat the opening and the short-term market direction meter is bearish. 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 down, but remains below zero at -31.04. 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.
Looking at the weekly charts it appears we have another 5% to 7% more to go before we hit the up-trend line from 2009. The DOW is currently at ~15010 and the intersecting up-trend is at 15685 (and rising), the SP500 still has a way to go to the 1700 level, NASDAQ at the 3750 level and the $RUT at the 1010 level marks the 2009 uptrend. Just a couple of serious down session would mark a good point for a reversal.
Investing.com members' sentiments are 35 % Bearish (falling from 70%) and it seems to be a good sign for being bearish. The 'Sheeples' always seem to get it wrong.
Investors Intelligence sets the breath at 37.0 % bullish with the status at BearConfirmed. (Chart Here ) I expect a market reversal at or before ~25.0.
StockChart.com NYSE Bullish Percent Index ($BPNYA) is at 38.47. (Chart Here) Below support zone and apparently going further down. Next stop was ~57 and now it is ~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 ($BPSPX) is at 40.80. (Chart Here) In support zone and falling - doesn't look good. ~62, ~57, ~45 at which the markets are in a full-blown correction. The next stop now is ~37.00.
StockChart.com 10 Year Treasury Note Yield Index ($TNX) is at 20.82. (Chart Here)
StockChart.com Overbought / Oversold Index ($NYMO) is at -38.25. (Chart Here)But anything below -30 / -40 is a concern of going deeper. Oversold conditions on the NYSE McClellan Oscillator usually bounce back at anything over -50 and reverse after reaching +40 oversold.
StockChart.com Consumer Discretionary ETF (XLY) is at 62.18. (Chart Here)
StockChart.com NYSE % of stocks above 200 DMA Index ($NYA200R) is at30.08 %. (Chart Here) Unless this downward trend reverses itself soon, we are going to see further downside. The next support is ~37.00, ~25.00 and ~15.00 below that. December, 20012 was the last time we saw numbers this low.
StockChart.com NYSE Composite (Liquidity) Index ($NYA) is at 10022. (Chart Here) Next stop is 9750, then 9250, and 8500.
The DOW at 10:30 is at 16003 down 135 or -0.83%.
The SP500 is at 1845 down 18 or -0.99%.
SPY is at 184.56 down 1 or -0.08%.
The $RUT is at 1073 up 1 or 0.07%.
NASDAQ is at 4174 down 40 or -0.95%.
NASDAQ 100 is at 3738 down 47 or -1.19%.
$VIX 'Fear Index' is at 27.91 up 1.57 or 5.98%. Bearish to Neutral Movement
The longer trend is up, the past months trend is negative, the past 5 sessions have been negative and the current bias is negative.
WTI oil is trading between 81.20 (resistance) and 79.85 (support) today. The session bias is neutral, volatile and is currently trading down at 80.73. (Chart Here)
Brent Crude is trading between 84.13 (resistance) and 82.93 (support) today. The session bias is neutral and is currently trading down at 83.89. (Chart Here)
Gold fell from 1244.59 earlier to 1236.09 and is currently trading up at 1238.40. The current intra-session trend is neutral. (Chart Here)
Dr. Copper is at 2.966 falling from 3.025 earlier. (Chart Here)
The US dollar is trading between 85.52 and 84.86 and is currently trading down at85.27, the bias is currently elevated and sideways. (Chart Here) Resistance made in Aug., 2013 (~85.00) has been broken and now is support.
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