August 30th, 2012
in Gary's blogging
Opening Market Commentary For 08-30-2012
Premarket SP500 was at 1401 around 8 am and gradually melted up and down until 8:30 where numbers were not very good and depressed the market slightly.
The market opened flat and down and it appears to be another low-volume, low-volatility trading day as investors await Ben Bernanke’s speech tomorrow. This will be the 12th. day where the equities market hovered around the flat-line.
The volume was heavier than usual during the first 30 minutes but evenly distributed between the bulls and the bears leaving the market direction in dispute. By 10 am the activity once again came to a standstill reminiscent of prior sessions.
Today's session action is probably going to be muted again until Dr. Ben speaks tomorrow. So much emphasis is being placed on what he has to say is probably going to be disappointing as his speech is going to be a repeat of what he has said before. I am looking for a 'sell the news' scenario for tomorrow.
Initial claims were unchanged from last week - thanks to the now ubiquitous upward revision of the previous week's data. This is the highest print in six weeks and the third week in a row that the claims data has been greater than expected.
Personal Spending rose 0.4% MoM, its first rise in three months, but this seems to have been 'funded' by consumers dipping into savings mode with the rate of growth of income rising at the same level as last month and as expected +0.3%.
The Spending rate of increase missed expectations however and with the savings rate dropping for the first time in 5 months (to 4.2%) - it suggests a 'man on the street' who is perilously close to the edge to meet his needs.
The RRR** looks very narrow at the opening bell 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 10:00 is at 13033 down 73 or -0.60%.
The 500 is at 1401 down 8.74 or -0.63%.
The $RUT is at 811.63 down 6.24 or -0.77%.
SPY is at 140.69 down 0.86 or -0.61%.
The trend is neutral and the current bias is down.
WTI oil is at 95.21 trading between 94.90 and 95.60 and the bias is negative.
Brent crude is at 113.19 trading between 112.30 and 113.45 and the bias is negative.
Gold is at 1662.17 trading between 1654.00 and 1663.98 with a positive bias.
Dr. Copper is at 3.48 up from 3.43 earlier.
Earlier the USD tumbled from 81.58 to 81.41 and is currently at 81.45.
“The market of course has been very slow lately. The ranges have been small, the volume light. Traders are getting anxious. Pressure is building, so it wouldn’t take much for either the bulls or bears to take over and push prices hard in one direction.”
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