Low Volume, Flat Market Marks Opening

September 5th, 2012
in Gary's blogging

Opening Market Commentary For 09-05-2012

Premarket action was mute, moving sideways at yesterday's closing numbers. The first 10 minutes after the opening bell sounded markets were in the green, but ever so slightly and on anemic volume. By the 15 minute mark the bears trickled in to melt market numbers down, again on anemic volume. Several pundits have blamed the low volume numbers recently to a Labor Day slump that persists after the fact. Hello, the low volume has been persistent for over a year now and getting worse. Could it be that the cash crowd isn't playing anymore and are no longer players?

Follow up:

By 10 am the markets had just turned green for the most part and flat. The DOW was up 3 points and with the volume so low I expect the HFT computers to melt the markets up somewhat during the remainder of the session. For now the session trend is slightly negative, but lacking any significant news I doubt we will be seeing any major movements.

The RRR** was extremely narrow at the opening bell and trading is not advised until volume increases substantially in my opinion. Swing trading remains at your own risk and being the market is flat and at a crossroads of sorts, I would prefer to sit on my hands rather than risk guessing incorrectly.

The DOW at 10:15 is at 13071 up 36 or 0.28%.

The 500 is at 1406 up 1.37 or 0.10%.

The $RUT is at 822.59 up 0.26 or 0.03%.

SPY is at 141.04 up 0.04 or 0.05%.

The trend is neutral and the current bias is neutral to bearish.


WTI oil was trading at 94.70 and rose to 95.65 and fell to 94.61 after the opening. The bias is negative.

Brent crude is at 113.39 trading between 114.35 and 113.35 and the bias is negative.

Gold is at 1691.78 trading between 1687.40 and 1694.60 with a neutral bias.

Dr. Copper is at 3.51 up from 3.45 earlier.

Earlier the USD tumbled from 81.67 to 81.13 and is currently at 81.20.

This iis d not good news projecting into the future the prospects of a prospering market place. I have always regarded the package carriers as the canary in the mine for dangerous trends.


Ahead of the Bell: FedEx

FedEx shares are losing ground before the opening bell Wednesday after the world's No. 2 package delivery company cut its earnings forecast for the quarter that ended last month.

The Memphis, Tenn.-based company said late Tuesday that the weak global economy is hitting its express unit particularly hard. That unit ships about 3.5 million high-priority packages on an average day and is most sensitive to economic downturns as customers choose slower methods of shipping to save money.

The express division also flies a large portion of Asian exports, which are slowing as consumers tighten purse strings in the U.S. and Europe. While business is softening, costs have gone up. Deutsche Bank analyst Justin Yagerman noted that FedEx Corp.'s fuel costs have gone up 22 percent since it last issued an earnings forecast.

Another one, of course, is the persistent low index numbers for the Institute for Supply Management’s manufacturing index remaining below 50% for the third straight month. This and the EU's financial problems plus China's continued reporting of a weaker economy.


Another Indicator In The Danger Zone

Aside from the fact that the Institute for Supply Management’s manufacturing index remained below 50% for the third straight month, indicating that the U.S. factory sector is in trouble, the ratio of the ISM new orders sub-index to the headline index has slid towards levels that have often coincided with broad economic downturns.

Admittedly, there have been a few false signals over the past three decades, but given other reports we’ve seen lately, today’s data lends further weight to the … [visit site to read more]

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The next two weeks are pivotal to the survival of the Euro.  Everyone knows it.  As a result, the sentiment has placed an emphasis on this week’s interest rate announcement by ECB President Mario Draghi.

** RRR = Risk Reward Ratio

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Written by Gary

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