August 27th, 2012
in Gary's blogging
Midday Market Commentary For 08-27-2012
Can you believe the markets eased up starting around 11 am with the lowest volume seen in months. The HFT melted the SP500 up 6 points from it low spot of the morning making a complete reversal as it moved higher than the opening numbers. It has to be the HFT crowd as no one else is trading. The algo computers are having a ball moving the averages around while most of us sit, stare and wonder what in the heck is all of this leading too. It can't be good to be in a corrupt and fixed market place.
At 11:20 the rise stopped and leveled out with a sight bearish slant. It appears the rise was caused by the algos liking the news that The Conference Board Leading Economic Index® for the U.S. Increases. By 12:30 the markets were mixed, flat and going nowhere.
The RRR** looks very narrow at the midday mark and any trades probably will end up on the unprofitable side if this market remains flat. Swing trading is at your own risk and being the market is at a crossroads of sorts, I would prefer to sit on my hands rather than risk guessing incorrectly.
The DOW at 12:30 is at 13157 down 0.49 or -0.00%.
The 500 is at 1413 up 2.76 or 0.20%.
The $RUT is at 811.26 up 2.14 or 0.27%.
SPY is at 141.85 up 0.34 or 0.23%.
The trend is neutral but within an up channel and the current bias is neutral.
WTI oil is at 94.98 trading between 97.76 and 94.45 and the bias is neutral.
Brent crude is at 112.22 trading between 115.50 and 111.60 and the bias is neutral.
Gold is at 1672.82 trading between 1676.80 and 1666.08 with a positive bias.
Dr. Copper is at 3.48 down from 3.50 earlier.
Earlier the USD tumbled from 81.72 to 81.50 and is currently at 81.61.
It seems to us that the technical outlook for the market has also turned negative. On Tuesday morning the S&P 500 made a new recovery high before backing off. This high, however, was not confirmed by the Nasdaq Composite, the small cap 600, the mid-cap 400, the Dow Industrials, the Dow Transports, the NYSE Composite and the Russell 2000. The number of daily new highs has been dropping on the latest rally. Last Friday the VIX dropped to 13.45, a number that has signified market tops over the last few years. This indicates a market that is highly complacent and far from fearful as a lot of pundits would have you believe.
** RRR = Risk Reward Ratio
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Written by Gary