Wednesday, February 05, 2014 Zeb’s Vue

General Information and Analysis

US

 

Comment:  (Data from 2/2/2014)

Comment for2/3/2014	Measure	Indicator	Ranking
Weekly RSI (14)	WeeklyRSI	51.4	Neutral
Long Term MVA (200 day MVA)	200 MVA	3.37%	Bullish
5 Day Slope of 55 day MVA	Slope55MA	-0.11%	Bearish
Intermediate Trend (Using ADX)	ADX(14)	31.44	Bearish
Short Term Trend (Daily RSI 3)	RSI(3)	11.13	Neutral/rising
Relative Volatility ATR vs. 1Stdev	ATR(90)	1.18%	Volatile Bear
VIX - MACD 10/30 (slope down)	MACD	1.290	Bearish

 

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.

 

After yesterday, all intermediate and short term indicators are bearish.  The long-term direction (200 Day MVA) is still bullish.

The market range on SPX was small (in comparison to 8 previous days starting 1/23/2014).  The Big Support is 1700 on SPX.   

On SPX, the market found support at the low of 11/7/2013.  While on 2/3/2014 the price penetrated that level, price bounced back up yesterday.  The market is down overnight, and the price will be tested again. 

Turning to futures, the S&P 500 support is 1734 to 1724. 

Yesterday I said: "Today, the overbought situation suggests that the market will have an upday, but on the other side, Price will unlikely test any areas that suggests the correction is over." 

The guidance was correct, as the market was up, but the up move was not convincing in any way.  Today is starting out down, but direction is unknown.  The US economic news is mixed, and so is the European news.  ADP jobs report was not convincing enough, as report showed US employers highered fewer works than the forecast/consensus. 

Japan is experiencing a fearful moment as the Nikkei plunges.  Yet, overnight the YEN strengthened. 

The S&P 500 Buillish Pct Index issued a sell signal (albiet it is not strong as it has not broken the P&F trend line off the bottom.)

S&P PIVOT ES Mini March Contract - Tuesday - Useful on Wednesday 2/5/2014

Yesterday 2/4/2014			2/3/2014
High	1753.50		High	1783.75
Low	1734.00		Low	1732.25
Close	1743.50		Close	1732.75
R2	1763.25		R2	1801.25
R1	1753.50		R1	1767.25
Pivot	1743.75		Pivot	1749.75
S1	1734.00		S1	1715.75
S2	1724.25		S2	1698.25

 

Stocks –

Zeb's VUE:

 Fear is in the air, but it is not a panic by any means (yet). 

Top interests:

1.   3M announces a $12B buyback

2.   Eurozone business activity is up - Spain higher  Eurozone retail sales tumble

3.   Nikkei up but a very small bounce after being crushed, but most Asian markets are up. 

4.   OLD NEWS - JP Morgan the worst gangster in the world shells out another $614 million to resolve violations of False Claims Act. 

5.   Keystone XL oil pipeline is being pushed by US senators and House Members.  They are trying to put pressure on Mr. Obama to approve it. 

6.   Farm bill is very near $1 trillion dollars.  It is going to Mr. Obama for signature. 

7.   Congressional Budget Office - by 2017, ObamaCare could lead to a fall of 2M full-time jobs, being replaced by part-time jobs.  They give multiple reasons for their forecast. 

8.   Puerto Rico's rating falls to BB+...  S&P maintained a negative outlook. 

Gold:      

Gold found a bid yesterday afternoon.  Why?  well that is anyone's guess really.  $1250 dollars is a significant support level as the price closed above that yesterday.  That level is psychological, I believe.  One of the small things driving Gold up is how many analysts (world-wide) are suggesting people start investing in Gold again. 

This morning, Gold is up again as well as Silver.

This is no-man's land as far as price.  Seasonally, this is the time for Gold to shine, but it is really only bouncing around.  In auction market theory, it is building a base looking for long-term investors to come in on one side or the other.  Seasonally, the side should be up (but only for a 90 days or so).  

The Federal Reserve of the USA is trying to change the psychology of consumers to thinking inflation.  This is proving difficult, but if that genie (inflation) gets out of the bag, we could see 1970's type inflation, and it will be even more difficult to get consumers to thinking the government could control it.