Friday, January 03, 2014 Zeb’s VUE

General Information and Analysis

Warren Buffet: “The best way to minimized risk is to think.”

 

US

Comment for 1/2/2014	Measure	Indicator	Ranking
Weekly RSI	WeeklyRSI	74.4	OverB
Long Term MVA (200 day MVA)	200 MVA	9.32%	Bull
5 Day Slope of 55 day MVA	Slope55MA	0.62%	Bull
Intermediate Trend (Using ADX)	ADX(14)	21.4	Neutral
Short Term Trend (Daily RSI 3)	RSI(3)	36.23	Neutral/Bear
Relative Volatility	ATR(90)	0.78%	Normal
VIX - MACD 10/30 (slope down)	MACD	-0.12	Bear

The intermediate and long term trend is up.  Yesterday was a correction.  Short term - market is neutral to bear.

The table above is a rating for intermediate and long term trend in the S&P500.  I used the S&P 500 as the indicator for the USA stock market.  For day traders: You may find it useful to trade in the direction of the trend.  However, looking at any daily chart over lots of years, the trading direction for the day is pretty random. 

S&P PIVOT ES Mini - Friday - Useful on Monday 1/2/2014

High	1840.75
Low	1821.75
Close	1826.50
R2	1848.75
R1	1837.75
Pivot	1829.75
S1	1818.75
S2	1810.75

 

Stocks –

Zeb’s View:  Yesterday was a minor correction; although day-traders may have felt it was a major move.  Stocks were being sold from the beginning as the trading in Europe was cautious. 

There is a common belief among "traders" that the first 5 days or so of the New Year has an inflow of funds into IRAs, bonuses from work, and new money positioning for the year.  At least for yesterday, that did not happen. 

Apple was downgraded by Wells Fargo to Market Perform from Outperform.  Apple is the largest component of the Technology Sector, which meant that Technology never gained any momentum to the upside yesterday.

Futures in all indexes are modestly higher this morning.  This may mean the "big" companies will recover from yesterday.  However, any move on a daily basis is pretty random. 

On the economic front, vehicle sales are due to be released today.  November vehicle sales came in much greater than expected.  This will be closely watched today.

Lots of "lip-flapping" from the Federal Reserve presidents as a plethora of them speechify.  No one expects any market moving revelation from Dr. Bernanke or others. 

The US dollar is often a leading indicator of stock market direction.  Ahead of the NY stock exchange opening, the US dollar index is up.  In recent years, when the dollar is up, the stock market will usually trade inversely.  Look at yesterday where the dollar index soared, and the stock market overall was down.

Stocks in Europe are up as of this writing.  This will, again, indicate a move to the upside for the US stock market.

Day-traders would be advised to be very careful if they short this market.  However, going long is pretty risky as well.   Overseas trading is not a very reliable indicator of what the traders in NY are going to do (in my opinion).  Traders will be grappling with the bad weather in NY.  Volume will be very low one would surmise for today.