Today Nero Fiddled While Rome Burned

July 13th, 2012
in Gary's blogging

Midday Market Commentary For 07-13-2012

Markets melted up a bit further by noon and then leveled out as volume declined to a trickle. A nice run up for the day but looks suspiciously like a bear trap in the making and I will remain in the background for the time being. If Monday ramps up then we will probably have a couple more up days where a few long swing trades might be in order. The World finances are in a complete mess with China slowly sinking into what might become a crash landing, several EU nations contemplating leaving the Euro and the 'doves' in the FED muse about increasing the Nations debt. All the while the Keynesian Politicians 'fiddle' with the economies as Rome, Athens and Madrid are literally engulfed in flames. Ashes to ashes, dust to dust – all things ignored will turn to rust.

Follow up:

Keep in mind that markets are temporarily in a melting zone, in between resistance and supports, where markets can turn on a dime as they did this morning. The 30 day outlook is still bearish, but near term bullish 'corrections' should remain foremost in thought. The RRR** turned out to be bullish by noontime for traders willing to jump in this morning, but risky at the very least. It is not completely unrealistic in thinking the 500 could move up and test the 1400 area in the coming weeks. I'll be watching next weeks movements carefully as we will most likely know more about the markets direction by Tuesday. The volume pattern is interesting as it matches the 7-3-2012 recent high or the start of a 3 day march upward?

The DOW at 1:30 is at 12736 up 162 or 1.30%.

The 500 is at 1352 up 18 or 1.75%.

The $RUT is at 799.94 up 10.31 or 1.31%.

The trend is neutral and the current bias is neutral.


WTI oil is at 87.09 trading between 87.44 and 85.60 and the bias is positive.

Brent crude is at 102.76 trading between 103.35 and 100.50 and the bias is negative.

Gold is up today at 1592, trading between 1600 and 1567 with a positive bias. Triangle breakout ahead?

Dr. Copper is at 3.50 up from 3.39 earlier.

As reported earlier the USD tumbled from 83.92 to 83.37 at 10:30 and recovered to 83.46. The ForEX scalpers were out in groves snatching up dollars which I pointed out should be a sign of further deterioration of the US markets.

** RRR = Risk Reward Ratio

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Written by Gary

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