By the noon hour, the averages stopped the morning melt-off and returned to trending upwards thanks to the BTFDers. Volume is falling off, but our proprietary market direction meter is becoming more bearish as the markets post new session highs.
The current volatility in the US dollar and gold has us sitting on our hands as we look for market direction.
We expect the markets to close down from this current levels.
The medium 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 and that is not enough for me to start shorting. The SP500 MACD has turned flat, but remains below zero at -6.05. 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 ($BPNYA) is at 62.64. (Chart Here) Very close to support, but rising.
StockChart.com S&P 500 Bullish Percent Index ($BPSPX) is at 71.20. (Chart Here) Rising from support.
StockChart.com Overbought / Oversold Index ($NYMO) is at –3.63. ($NYMO) (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 66.82. (Chart Here)
