Midday Market Commentary For 04-14-2014
As suspected the averages turned around from the morning lows and started melting back upwards, but not so high as to make us rush out and buy with abandon. The red flags of caution still wave briskly in the market winds.
By noon the averages, SP500 in particular, had risen back up above the 100 DMA, but on low volume concerning investors of the strength and bullish validity of today’s ‘recovery’.
The markets look so weak and frail today and I believe anything could trip Mr. Market and send him tumbling.
StockTiming.com
After listening to the media, many still think that the stock market is positive and doing well.
Today’s two charts show the reality of how 5 mainstream indexes have done since December 31, 2013, and as of their March 2014 highs.
StockTiming.com
The short term indicators are leaning towards the hold side at the midday. 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 6% correction (and recovery) and that is not enough for me to start shorting. The MACD has turned down slightly, but remains above zero. I would advise caution in taking any position during this volatile transition period although Barchart.com shows a 56 % sell. (Remember this has been negative for weeks.)
It is looking more and more like an ordinary correction and we will probably will see the major downturn later in 2014 after investor realize there isn’t going to be a real recovery with inflation and interest rates easing up anyway.
While not necessarily predicting a waterfall, jaw dropping market decent I don’t think the market can avoid at least a 20%, from peak, correction tied into the end of the Fed QE tapering. The real decent could come before or after the QE ending, either way, it should occur by the end of 2014
