Live Market Commentary For 05-21-2012

May 21st, 2012
in Gary's blogging

Market Closing Comments:

Markets closed up as expected and the 'dippers' were out in force and not expected. Only confirms that we will have an up day tomorrow. Facebook waddled along around 33.85 and $RUT closed above its 200 day MA and support. TLT, a safe haven, moved up against the rising tide of the markets closing at 123.84. A bearish move for the markets. The oils move up one point, 91 to 92 for WTI oil and 108 to 109 for Brent. Gold rose from 1587 to 1593. Dr. Copper moved up nicely from the 3.50 area to 3.53.

European markets finished broadly higher today with shares in Germany leading the region. The DAX is up 1.06% while London's FTSE 100 is up 0.82% and France's CAC 40 is up 0.82%. The USD suffered a loss falling from 81.55 earlier to 81.09. The charts below tell the story for the day.

Follow up:

The SP500 at the close.

The $RUT at the close. Notice that it climbed above its 200 day MA.

The DOW at the close.

The Indexes at the close.

Noon Market Commentary:

The markets have erased Friday's decent making a nice showing for the bulls by noon. Unfortunately today's rise has been on low volume which is always suspect when the markets rise. By the close I expect a somewhat enthusiastic round of profit taking as we have witnessed in past sessions, but with no appreciable downturn. Today could very well be the start of a traditional 'Summer Rally', albeit a bit early by 5 weeks. There have been NO signals that says we are at bottom of any sort, but this is a crazy market and anything could happen.

The DOW is at 12458 up 88.17 or 0.70%, the 500 is at 1309 up 13.84 or 1.06%, the $RUT is at 750 up 2.93 or 0.40% and SPY is at 131.35 up 1.53 or 1.23%. The near term trend is down and the current bias is up with the markets trading in very light volume and showing signs of weakness. Today is not the day to dip ones toes into the market waters to see what the temperature is.

After Market Opening Comments:

The market opened up and went sideways for the first ½ hour with moderate green volume for the first 10 minutes. The bears took over in the next 10 minutes but only bringing the markets very slightly off the morning highs. The trend is still down with the bias negative. Facebook (FB) opened down at the opening stock price plummeted nearly 8% to $35.30 in early trading. At 10 am FB dropped to 33.50 and the bias is neutral. I feel sorry for those that bought in early on Friday.

The negative vibes from around the World are abound. Even the risk/reward percentages are still not where I like them as the market can turn on a dime at this juncture. This is making any trading risky and long term investing prices are going to get better, but not without some up and down motions first. FAS, long ETF, is only up 1.24% in this early morning and it was down about as much earlier making the trading window very small and risky. Not my cup of tea. $VIX is up at 24.31 which is nice for trading volatility but needs to creep up even higher to help protect from bad guessing. The DOW is at 12410 up 39.58 or 0.32%, the 500 is at 1299 up 4.87 or 0.38%, the $RUT is at 750 up 2.93 or 0.40% and SPY is at 130.36 up 0.63 or 0.52%. The trend is down and the current bias is up.

Premarket Commentary:

Not much to add here except the premarket SP500 is up 6 points not totally unexpected because nothing of any importance happened over the weekend. My feeling is that we will see the markets downturn before the end of the day.


The market is in pretty bad shape right now, so in a twisted way, it may be close to a tradable bottom. That’s how Wall St. works. Once a downtrend begins, it’s better to get a complete washout before attempting to rally.

There are many breadth indicators that are at an extreme level. If the market bounced here, it would be supported by a long list of technical indicators.

But unfortunately news from Europe is dominating. Bad news regarding Greece and Spain will quickly push the market down. Good news could easily induce buying for several days or longer.

The risk/reward for entering new shorts is not good right now. Be defensive. The biggest up days occur within downtrends, so even an innocent 2-3 day bounce could push the indexes up 5%, and that means many stocks can move 10% or more “

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Written by Gary

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