Written by Gary
Afternoon trading was, again, more or less sideways and within a narrow zone except for the FOMC minutes release. The averages went up fractionally, then down and finally back up to where they were prior to the report. All in all, the minutes were somewhat of a washout relative to market expectations
By 4 pm the averages were all in the red with the Dow flat, the small caps off -0.4% and the $RUT down nearly -1.0%. Volume was near anemic and no last minute push either way, obviously investors are concerned about future market direction.
Our medium term indicators are leaning towards sell portfolio of non-performers at the close and the short-term market direction meter is neutral moving from bullish. We remain mostly conservatively bullish, neutral in other words. Right now now I am getting very concerned any downtrend could get very aggressive in the short-term and volatility may also promote sudden reversals. The SP500 MACD has turned flat, but remains above zero at 24.73. I would advise caution in taking any position during this uncertain period and I hope you have returned your ‘dogs’ to the pound.
Having some cash on hand now is not a bad strategy as market changes are happening everyday. As of now, I do not see any leading indicators that are warning of a ‘long-term’ reversal in the near-term. There may be one later in 2015, but any market fluctuations we see now are more of a internal market rectification than a bear market.
Investing.com members’ sentiments are 65 % Bearish (falling from 70% and now rising from 33%).
Investors Intelligence sets the breath at 53.5 % bullish with the status at BearCorrection. I expect a market reversal at or before ~25.0 should the direction continue to descend.
StockChart.com Overbought / Oversold Index ($NYMO) is at +13.04. But anything below -30 / -40 is a concern of going deeper. Oversold conditions on the NYSE McClellan Oscillator usually bounce back at anything over -50 and reverse after reaching +40 oversold. (Now were are high enough to descend again – watch out!)
