Opening Market Commentary For 04-16-2014
Premarkets were up +0.60% this morning in light of ‘not-so-good’ financial reporting. The markets opened at the same level and slowly began to melt off the opening high with falling volume to match. The SP500 closed above 1839 and opened above the now support line in the sand 1847. Previously, going below 1839 was suppose to be the death knell for the SP500, apparently not, perhaps a stay of execution.
By 10 am the SP500 was sneaking down to the 1847 support on low volume. Generally, the averages were showing signs of stress as investors rethinking their positions. Again, caution is the theme of the day.
Something to think about as the bull and bear pundits argue which way the markets are going to go.
Over 40% Of The S&P 500 Is In Correction Mode
The S&P 500 is down around 4% from its highs(outperforming the high-beta hangovers of Nasdaq and Russell 2000 that were down almost 10% from their highs at today’s lows).
But under the surface, the S&P is ugly with the 500 index members down 10.5% on average. 213 members of the S&P 500 are down over 10% (in correction mode).
Only 72 member of the 500-stock index are ‘beating’ the index… this is not just a small-cap growth-hype selloff… it’s spreading…
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 MACD has turned down slightly, but remainsabove zero. I would advise caution in taking any position during this volatile transition period although Barchart.com shows a 48 % sell. (Remember this has been negative for weeks.)
In looking at the 50 DMA, the current SP500 opened opened that line, but way above the 200 DMA and the small caps remain below 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.
