July 17th, 2012
in Gary's blogging
Midday Market Commentary For 07-17-2012
Now this fickle market moves itself back up almost to where it started out this morning except the green volume is light to moderate and not the convincing red heavy volume that drove the markets down. It used to be 'Hopium' that moved the markets up but now Tinker Bell is sprinkling her 'Fairy Dust' and DaBoyz are having a hay day manipulating the markets again. The difference is that you and I know this rise won't last and makes trading a lot easier.
RRR** looks better for shorting at noon, but be careful of Friday as Options expire and that could in itself drive markets up and crush your position. From a longer range perspective, next week might prove better moving into short position. But as long as we are in the zone of market indecision, you can expect volatility, market swings and direction surprises.
Consumers Flash Warning Signal by Lance Roberts
At the end of last year we began discussing the issues of the excessively optimistic views of the mainstream media and analysts, who were confusing a skew in the seasonal data caused by an unseasonably warm winter and global Central Bank interventions with an organic economic recovery. The problem with maintaining an "optimistic bias", which attracts readers and viewers for media driven outlets, is that it fogs the lens of logical thinking.
While bad news may be good news for a market hoping that it will spur more stimulative measures from the Fed to boost asset prices, for Main Street America bad news is just bad news. More importantly, the decline in consumer confidence continues to perpetuate the virtual economic spiral. As the consumer retrenches, the decline in aggregate end demand puts businesses on the defensive, which in turn reduces employment. The reduction in employment, and further stagnation of wages, puts the consumer further onto the defensive, leading to more declines in demand. It is a difficult cycle to break.
(Read More Here. . .)
The DOW at 12:30 is at 12788 up 61.68 or 0.48%.
The 500 is at 1360 up 6.49 or 0.48%.
The $RUT is at 799.13 up 2.39 or 0.30%.
SPY is at 136.07 up 0.65 or 0.47%.
The trend is neutral and the current bias is up.
WTI oil is at 88.51 trading between 89.25 and 87.40 and the bias is neutral.
Gold is at 1590, trading between 1599 and 1571 with a positive bias.
Dr. Copper is at 3.46 down from 3.51 earlier.
As reported earlier the USD rose from 83.06 to 83.67 and currently is down at 83.32.
** RRR = Risk Reward Ratio
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Written by Gary