Opening Market Commentary For 03-26-2014
Premarkets were up +0.45% and had a momentary +0.05% gain when the US Durable Goods for February came in at 2.2% versus the 0.8% expected and -1.3% prior, but fell back. The DOW Futures were also trading +0.55% higher prior to the opening along with the NASDAQ at +0.20%. The oils and the US dollar were trading higher while gold and copper were trading lower.
Markets opened up as expected reflecting premarket trading and began to decline sharply during the first 5 minutes on moderate volume, opps, back up again. By 10 am the averages were sea-sawing within a narrow range generally trending down off the opening highs on low volume in spite of improved PMI data.
DailyFX reports that the US Markit Services PMI for March came in at 55.5 versus the 54.0 expected and 53.3 prior. Composite PMI came in at 55.8 versus 54.1 prior.
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 50DMA, 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 16 % sell.
In looking at the 50 DMA the current SP500 is above that line, but way above the 200 DMA and on 02-06-14 crossed above the 100. I can not see, as of right now where the MA’s are rolling over to indicate any permanent bear run in fact quiet the opposite.
Chris Puplava writes, “As shown below, the long-term outlook for the S&P 1500 is clearly bullish as 77.0% of the 1500 stocks in the index have bullish long-term trends.”
I still believe that Mr. Market is STILL not through playing with us and even newer historical highs are a distinct possibility beyond what we have seen, mainly because the amount of bond buying the Fed still does on a monthly basis. For those who are hell-bent bears, this article, 5 Reasons Your Simple Bear Market Plans Could Backfire, should be required reading.
