August 16th, 2012
in Gary's blogging
Midday Market Commentary For 08-16-2012
By 11 am several averages moved up to previous highs made over the past several sessions, eased up a bit more at noon (SP500 @1413, $RUT@808) and backed off and fraction, but refuse to give up in trying to move higher and began to move sideways. Volume remained low during the morning trading session which was appearing to be the antics of the High Frequency Trading crowd.
The DOW stayed within its rectangle channel, the $SPX also stayed within a climbing pennant and the Russell had a pennant and a what could be considered a Rising Wedge. The charts, as mentioned MANY times, are not to be trusted because of the market manipulations of the low volume market movers like HFT and DaBoyz. These comments are for speculation purposes only to point out how many different signals are being produced.
A break is coming and is long overdue me thinks.
The RRR** is not in the best interest of the trader this afternoon still being very narrow and without a fall back if you 'guess' incorrectly. Until we break out of this 'sideways' channel all bets are off. I expect the markets to flounder like they have for the past 6 sessions and melt down fractionally by the close.
The DOW at 12:30 is at 13324 up 69 or 0.52%.
The 500 is at 1413 up 8 or 0.57%.
The $RUT is at 808.92 up 4.66 or 0.58%.
SPY is at 141.75 up 0.80 or 0.57%.
The trend is neutral and the current bias is positive.
WTI oil is at 95.29 trading between 95.40 and 94.15 and the bias is positive.
Brent crude is at 116.24 trading between 116.65 and 115.50 and the bias is positive.
Gold is neutral today at 1615.62 trading between 1618.85 and 1600.83 with a positive bias.
Dr. Copper is at 3.38 up from 3.36 earlier.
Earlier the USD rose from 82.66 to 82.94 and then falling to 82.40 starting after the 8:30 reporting of morning financial's. The USD is currently at 82.44.
The continuing saber rattling emanating from Israel's leadership is gaining forcefulness in it escalating rhetoric. Matan Vilnai, Israel’s ambassador to China, says Israel may not wait for the US Presidential election to mount an attack on Iran's nuclear facilities. The feeling among the Israel political leadership that US 'dialogue' with the Iranian officials is being 'stonewalled' and action in the very near future may be warranted.
An Israeli attack on Iran’s nuclear programme is likely to trigger a broader war between the two countries that could last 30 days, according to the Israeli minister who has been readying the country’s home defence.
His comments follow a surge in speculation about an impending Israeli strike on Iran’s nuclear facilities, as well as a series of reports in the Israeli media questioning the country’s readiness for war with Iran.Israel regards the Iranian nuclear programme as an existential threat and has said repeatedly that it will not permit the development of an Iranian nuclear bomb.Senior
US officials have made clear they wish to give more time to diplomacy and sanctions in an effort to halt the Iranian programme.That position was reaffirmed on Tuesday by Leon Panetta, the US secretary of defence, who insisted that “the window is still open to try to work towards a diplomatic solution”.
The really disturbing news from Israel, from an investment standpoint, is that Prime Minister Benjamin Netanyahu is actively considering military action towards Syria and Iran. As I mentioned yesterday, any attack would catch many investors with their pants around their ankles. This is because most 'sheeples', including current market investors have no clue of this escalation because of the US doves in power keeping a lid on this discussion.
There is a widespread belief among the liberal elite that Israel will not try any military action by themselves and wait until AFTER the US Presidential elections. Many are ignoring the increasing probability of these events occurring or believe they can catch a falling knife. Remember the darkest night of the month, best for an attack, is this Friday and the markets won't open until Monday morning. Just saying . . .
Israel would be willing to strike Iran’s nuclear facilities, even if doing so only delayed its ability to produce nuclear weapons for a few years, Israeli Ambassador to the U.S. Michael Oren said.“Diplomacy hasn’t succeeded,” Oren, 57, said today.
“We’ve come to a very critical juncture where important decisions do have to be made.”Syria’s stockpiles of chemical weapons are a grave concern to Israel amid the uprising against President Bashar al-Assad, Oren said.
“The situation in Syria is highly fluid, highly flammable,” he said, so much so that Israel may have to deal with its northern neighbor before any confrontation with Iran. “If you had to assign a clock to” Syria, Oren said, ’’that clock is ticking.’’
Israel’s Haaretz newspaper reported Aug. 10 that Prime Minister Benjamin Netanyahu is considering a strike before the U.S. presidential election. Oren said the Nov. 6 election isn’t a consideration in Israeli decision-making.“The issue is not the American elections,” he said in an interview today with Bloomberg Television.
“The issue is the degree to which the Iranian program has reached a critical point where they can begin to put together nuclear weapons.”Writing in the Wall Street Journal on Aug. 7, Oren said a nuclear-armed Iran would be able to “commit incalculable atrocities” and that the window for diplomacy to avert that “is now almost closed.
”That wouldn’t be the first time Israel has acted militarily in what it describes as self-defense. In addition to its 1981 destruction of Iraq’s Osirak reactor, Israel in 2007 attacked a reactor under construction in Syria.
One question is whether Israel would inform the Obama administration -- knowing it may disagree -- in advance of a strike on Iranian nuclear facilities.
** RRR = Risk Reward Ratio
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Written by Gary