Opening Market Commentary For 04-25-2014
Premarkets were down -0.30%, oils and the US dollar were off prior to the opening. Ukraine tensions are still on the investors front burner along with some disappointing 1st quarter results.
Markets opened down gathering steam by the 15 minute mark on moderate volume. By 10 am the averages were starting the familiar sea-saw action, trending down (-0.50%) on falling volume.
The blue-chip index had been clinging to a weekly gain, but it’s now negative for the week. Keep an eye open for a heads and shoulder pattern on the SP500 and breaking through the neck on or about May 5th.
Markit US Services PMI Drops; Job Creation Near 2-Year Lows
Markit’s US Services PMI dropped and missed expectations input and output prices soared, employment tumbled, and business activity slowed.
Staffing levels increaed at the slowest pace since June 2012 and the latest expansion of new business was only slightly faster than the 18-month low seen in March, and weaker than recorded at any time in 2013.
So much for that post-weather pent-up-demand surge…
The short 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, only a past 6% correction (and recovery) and that is not enough for me to start shorting. The SP500 MACD has turned up, but remains abovezero at 4.48. I would advise caution in taking any position during this volatile transition period although Barchart.com shows a 8 % sell. (Remember this has been negative for weeks.) Investing.com members’ sentiments are 69 % bearish.
In looking at the 50 DMA, the current SP500 opened above that line and the small caps remain above the 145 DMA. I can not see, as of right now where those MA’s are rolling over to indicate any permanent bear run but the failing small caps are a real worry.
