August 30th, 2012
in Gary's blogging
Midday Market Commentary For 08-30-2012
About 10:30 the markets showed a decidedly bearish slant as the averages fell to lows not seen since the beginning of August. The DOW went below 13000 for a moment, but other 'support' lines were not violated during this decent by the other important averages. Red volume was low but much heavier than previous sessions and may signal investors sentiment.
There are so many news events coming up in the next several weeks that could swing the markets. The first one is tomorrow at 10 am when Bernanke’s speech lacking any substantive meat will erode the averages even further.
I still believe the markets could go in either direction – maybe both in the next several weeks. I remain cautious and reserved as the markets could descend tomorrow and then climb higher when the German High Court gives its blessings to go ahead with ESM allowing it to be ratified on September 12th. I say again, now is NOT the time to bet the farm.
The RRR** finally turned in a positive number if you were quick to jump in around 10:30 and do a short. The RRR still isn't something I would write home about, but sufficient enough this morning to have made a profitable trade. I hope you didn't get greedy and stay in. If you watched the volume drop that was a signal to jump out as the HFT crowd likes to melt the markets up when the volume becomes anemic.
Swing trading is still 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 as to what Ben is going to say tomorrow or more accurately, how the market is going to react.
The DOW at noon EST is at 13002 down 104 or -0.80%.
The 500 is at 1399 down 11 or -0.78%.
The $RUT is at 809.12 down 8.70 or -1.06%.
SPY is at 140.46 is down 1.04 or -0.74%.
The trend is neutral and the current bias is down.
WTI oil is at 94.12 trading between 94.90 and 95.60 and the bias is negative.
Brent crude is at 112.53 trading between 112.30 and 113.45 and the bias is negative.
Gold is at 1653.49 trading between 1650.90 and 1663.98 with a negative bias.
Dr. Copper is at 3.44 down from 3.48 earlier.
Earlier the USD tumbled from 81.58 to 81.41 then rose to 81.77 when the equities fell and is currently at 81.75.
Yesterday the SP500 futures after the close stayed at 1406 (SP500 closed at 1410.49) until 8 pm where it suddenly starting dropping. By 11:45 pm it had fallen to 1401.45. My question to you is who or what is manipulating the market at these hours while the majority of us are finished for the day. There was no news or major event that would have been negative enough to make the markets move in this manner.
When is the SEC going to step in and stop allowing select privileged groups from using this financial instrument as their own personal playground? Leveling the stock exchanges so all can buy and sell without penalties during 'normal' business hours (8 to 5 EST) would go a long way to stabilize the market place. Anything after these hours, without exception, would be bid on the daily market on the next open session.
** RRR = Risk Reward Ratio
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Written by Gary