Premarkets were up +0.50% and fell to +0.35% when the U.S. Retail Sales printed out at 8:30 am to the be weakest in six months. The SP500 jumped up to +0.30% at the opening, the small caps opened at + 0.45% and the $VIX dove to 13.53 from 14.15.
By 10 am the averages were still in the green, but trending down as investors remain in a 'lurch' wondering where this casino market will end up.
The medium term indicators are leaning towards the hold side at the opening. The all important signs of reversal, up or down, have not been observed so we are mostly, at best, neutral and conservatively holding. The important DMA's, volume and a host of other studies have not turned and that is not enough for me to start shorting. The SP500MACD has turned flat, but remains below zero at -8.45. I would advise caution in taking any position during this uncertain period although some technical indicators are starting to turn bearish.
Investing.com members' sentiments are 44 % bearish and when it switches over to bullish, as it did on Tuesday 8-5, watch for the market bottom to fall out some are saying as the markets usually go against 'Sheeple' buying high and selling low.
Investors Intelligence sets the breath at 58.4 % bullish with the status at BearConfirmed. (Chart Here )
StockChart.com NYSE Bullish Percent Index ($BPNYA) is at 62.58. (Chart Here) Very close to support, but rising.
StockChart.com S&P 500 Bullish Percent Index ($BPSPX) is at 71.20. (Chart Here) Rising from support.
StockChart.com Overbought / Oversold Index ($NYMO) is at -3.63. (Chart Here) (Need to type in $NYMO) Oversold conditions on the NYSE McClellan Oscillator usually bounce back at anything over -50. Being close to the zero mark is good but not out of the woods just yet.
StockChart.com Consumer Discretionary ETF (XLY) is at 66.68. (Chart Here)
Chris Ciovacco says, "As long as the consumer discretionary ETF (NYSEARCA:XLY) holds above 67.06, all things being equal, it is a good sign for stocks and the U.S. economy." (Actually the support looks to be in the 66.88 range) We have entered an area that concerns me should the XLY drops any further. This chart clearly shows that dropping below 65.50 should be of a great concern to bullish investors.
Bottom line here is that I have not seen any serious bears jumping out of the woods just yet, although I am VERY concerned that ANY minor correction could turn nasty in a heart beat. One significant signal would be daily losses in any of the major averages that go over the 'magic' 3 % and then you need to pay close attention to risk-off tactics. There hasn't been a 10% correction in several years and some investors are becoming increasingly concerned an imminent correction is on the way.
Sometime in the future, there will be another three percent drop, only it will go to four, recover somewhat and the BTFDers will cry halleluiah and buy again. Only this time it doesn't recover fully like in the past and drops again, increasing the net drop to seven percent and so on.
Investors are currently unhappy, unenthusiastic, skittish and ready to jump ship every time it nudges against a small financial iceberg. They remain long for now unable to afford to sell and live off cash savings that have negative real rates thanks to the Feds. They feel in their guts, correctly, that a real 'correction' is coming and can't do anything about it until it is too late. Greed rules the day and investors should be very cautious.
One thing to keep in mind is that stocks may not be setting up for a fearsome bear market. History shows that there are two types of corrections -- sharp, brutal downturns that clear the air fairly quickly and prolonged periods of backing-and-filling that gradually remedy built-up imbalances. Time will tell which one lies ahead.
The longer 6 month outlook is now 35-65 sell and will remain bearish until we can see what the effects are in the Fed's 'Tapering' game plan, Russia's annexing game playing and of course the World's newest player Iraq and Israel. I would also take chart and other technical indicators with a lessor degree of reliability for the time being and watch what the Janet Yellen's Fed does over the next couple of months.
As long-time readers know, says David Moenning, "I believe it is VITAL to have systems and/or models to guide one in their investing journey. As the late Marty Zweig used to say, 'Those who rely on a crystal ball will wind up with an awful lot of crushed glass in their portfolio'." This basically states our views on the market too, although it is best to be ready for the unexpected if you are bullish.
The DOW at 10:00 is at 16594 up 37 or 0.22%.
The SP500 is at 1940 up 6 or 0.32%.
SPY is at 194.19 up 0.65 or 0.33%.
The $RUT is at 1137 up 4 or 0.33%.
NASDAQ is at 4410 up 21 or 0.48%.
NASDAQ 100 is at 3928 up 22 or 0.57%.
$VIX 'Fear Index' is at 13.73 down 0.39 or -2.76%. Bullish Bearish Movement
The longer trend is up, the past months trend is net gain, the past 5 sessions have been positive and the current bias is elevated, but melting downwards.
WTI oil is trading between 97.63 (resistance) and 97.05 (support) today. The session bias is neutral and is currently trading up at 97.35. (Chart Here)
Brent Crude is trading between 104.37 (resistance) and 103.26 (support) today. The session bias is positive and is currently trading up at 104.19. (Chart Here)
Gold rose from 1306.09 earlier to 1315.51 and is currently trading down at 1313.80. The current intra-session trend is elevated and sideways. (Chart Here)
Dr. Copper is at 3.123 falling from 3.139 earlier. (Chart Here)
The US dollar is trading between 81.71 and 81.40 and is currently trading down at81.52, the bias is currently negative and volatile. (Chart Here)
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