Market Commentary: Averages Off Session Lows And Trending Sideways

Written by Gary

Markets have recovered fractionally from the morning lows, but still remain in the red. The noontime trend is up, but is now not expected to rise into the green anytime this session as volume is falling to sometimes anemic levels.

By noon the averages had recovered half of the morning losses and appeared to have started a sideways trading movement. Investors are obviously sitting on their collective hands.

Our medium term indicators are leaning towards sell portfolio of non-performersat the midday and the short-term market direction meter is bullish moving from neutral. 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 24.51. 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 66 % 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!)