Opening Market Commentary For 04-02-2014
Premarkets remained around +0.05% until the opening where the SP500 edged up +0.07% marking a new historic high (1886.97) on volume that was so low it was difficult to measure. Within 60 seconds of the opening some investors got cold feet and the averages slacked off somewhat leaving the rest of us wondering if we were going to see a sell-off as the SP500 slipped below yesterday’s closing numbers.
By the 15 minute volatility was in high gear sea-sawing the averages and the SP500 tested its new high and slipped up to a newer high of 1887.82 on moderate, but falling volume.
During the first half hour the small caps remained up ~0.35% and our propriety chart indicator never reached its high water mark leading us to believe we are seeing a top – at least for now.
By 10 am the averages were trading sideways at +0.04% for the large caps and ~+0.10% and then the sell-off started first easing the DOW and SP500 into the red and the small caps falling below yesterday’s closing numbers. The HFT algo computers are hard at work jerking the averages around like ping pong balls most likely confusing even Mr. Market – then the markets were in the green again! By 10:15 the SP500 had tested the earlier high marks but had not crossed the historic high mark.
The short term indicators are leaning towards the hold side at the opening with a finger ready on the sell button. 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 56 % sell. (Remember this has been negative for weeks.)
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.
