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Tuesday, November 5, 2013

Stuck In Neutral

 If we are going into a correction, the bears need to kick it into gear: today's volume was about as bad as yesterday's up volume. We are stuck directly in the middle between pivot points, so it is just about impossible to know which way the market is going o go, but it is likely to start heading for one or the other soon. MACD says we are about to head down; RSI is less sure about that, as it is going down, but did not really reach overbought condition,m so it is very possible it could go higher. ATR is dropping to an extreme low, something that ofen happens just before a big up move. So, the chart is pretty inconclusive.

There isn't too much inconclusive about crude oil; this is in a bad down trend that appears to be getting worse. It os now at the S1 pivot point, which may be support; I would not count on that. How long this can keep dropping without bringing the stock market down with it is unknown, or even if it will happen. At 93, it is still above the longer term support at 90, and the really longer term support at 80. What is really bizarre is that the energy sector has been strengthening as this has been dropping; that one I don't get.

Gold is in the process of trying to start an up trend, and has been since late June. The bounce back has been pretty weak, which makes me think this nis going to spend more time carving out a bottom. While it is not going to go much higher in the short term, I don;t think it's going much lower, either.

The yield on the 10 year Treasury is rising, and in doing so, meeting the November pivot points.In the last 6 months, the pivot points have done a reasonably good job of defining the range, and so far it looks like that is going to continue.

Along with yields, the dollar is rising, and this is the primary cause of the weakness in stocks and in oil, The fact that stocks have not significantly dropped while this has been rising indicates two possibilities: either stocks are not being affected by this as much as usual, or, perhaps more likely, the stock market does not believe this move will go much higher. That remains to be seen.

The market is in neutral right now, as neither the bulls nor the bears are willing to stick their necks out. What it is waiting for I'm not sure, but I expect it to start moving soon.

I will have the new highs update shortly.

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