July 9th, 2012
in Gary's blogging
Opening Market Commentary For 07-09-2012
Premarket stats were down a tiny bit, but as the market opened it vainly tried to melt up under light green volume. By the 15 minute mark the volume was red but low setting the pace for the week. This weeks movements are going to be measured, slow and moderate, regardless of the news. I think we can see both bearish and bullish movements this week but perhaps with more down than up.
Until investors become convinced that there is no QE coming until after the elections we will not see any real downward movements. I have said all along that we wouldn't see a QE this year and if we were to see one it would have been in June. Now I have moved that target date to next May to June time-frame.
The Holiday and weekend news has been extremely bearish causing some disillusion among investors and traders alike regarding any bear rally continuing this week. News is continuing to come out of Europe that things are not going well in spite of what the politicians are promising to be true. Today's decline is further proof that a crisis is needed to resolve the World's financial problems.
The RRR** is not favorable for trading but is moderately bullish for swing trades.
The DOW at 10:30 is at 12707 down 64.41 or -0.51%.
The 500 is at 1348 down 5.83 or -0.43%.
$RUT is at 802 down 4.86 or -0.60%.
SPY is at 134.97 down 0.57 or -0.42%.
The trend is down and the current bias is down.
WTI oil is at 85.02 trading between 88.92 and 84.12 and the bias is positive.
Brent crude is at 98.78 trading between 99.19 and 98.02 and the bias is positive.
Gold is up today at 1586, trading between 1576 and 1588 with a positive bias.
Dr. Copper is at 3.42 up from 3.40 earlier.
Jeremy Robson has penned some views below that reflect my own in that I too have been bearish since 2010 and that the QE's have artificially propped up the markets. Where I feel we should let water seek its own level there are those that believe more along the Keynesian financial solutions where more debt is O.K. to occur. So far this morning we are witnessing a slow meltdown of the markets.
Things That Worry Me, As A Bear by Jeremy Robson
For me to be wrong going forward either:
1. The private sector has to be able to grow faster than the negative impact from government spending reductions.
2. Governments continue to keep their deficits at the elevated levels that have kept their economies growing.
I have often said that until the unemployment issues are resolved around the World these unemployed folks will not be able to contribute to their Nations economy’s. The can't buy homes, they can't buy televisions, cars or other big ticket items that tend to move the consumer economy forward. They might as well take the easy road and continue to suck up government benefits. Deciding that living off subsidies is alright and a lot easier than actually have to go to a real job as some studies have shown to be the case.
In trying to stay away from commenting on US Politics all I can say is what I have observed lately of politicians around the World is that they have NOT done a very good job of putting folks back to work and that is true in the US as well.
This simple fact of life that employment has to improve before economies can improve.
** RRR = Risk Reward Ratio
To contact me with suggestions or deserved praise:
Written by Gary