September 11th, 2012
in Gary's blogging
Opening Market Commentary For 09-11-2012
Premarkets were up from yesterdays close by a few points and dropping at the release of the US Trade Balance. Immediately rising to previous levels and continuing at the opening. The volume was low and by 10 the markets melted up a few points and retreated a bit. All of this within a very narrow range and continued low volume.
By 10:30 the markets seem to have settled in for the day as volume started to drop even further leaving room for DaBoyz and HFT to do their thing in the afternoon.
The RRR** was very narrow, again, at the opening bell and any trades will probably end up on the unprofitable side as long as 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 10:30 is at 13322 up 68.40 or 0.52%.
The 500 is at 1433 up 4.70 or 0.33%.
The $RUT is at 843.77 up 4.40 or 0.53%.
SPY is at 143.98 up 0.48 or 0.33%.
The trend is up and the current bias is up.
WTI oil is at 97.07 trading between 96.08 and 97.25 and the bias is positive.
Brent crude is at 114.97 trading between 114.35 and 115.20 and the bias is positive.
Gold is up today at 1737.20, trading between 1725.85 and 1738.05 with a positive bias.
Dr. Copper is at 3.71 up from 3.65 earlier.
The US dollar fell from 80.60 earlier to 80.11 and is currently trading at 80.17.
A quick recap to the July 2012 trade data released today:
Import growth has positive implications historically to the economy – and the seasonally adjusted imports were reported down month-over-month. Econintersect analysis shows growth of 2.4% month-over-month (unadjusted).
Exports were reported down, and Econintersect analysis shows exports down 6.9% month-over-month. The headwind was industrial supplies (also down as an import). It takes a microscope to see year-over-year growth, and is likely an indication of a growing global economic contraction.
The market expected a trade deficit between $44.0 and $46.0 billion and the seasonally adjusted headline data from US Census came in at a $42.0 billion deficit.
There were no elements in this trade data which were recessionary for the USA – but was pointing towards global problems.
The U.S. trade deficit grew slightly to $42 billion in July, widened by sharp drops in exports to Europe, India and Brazil that offset a steep decline in oil imports. The Commerce Department said Tuesday that the trade deficit widened 0.2 percent from June's deficit of $41.9 billion.
U.S. exports fell 1 percent to $183.3 billion, lowered by fewer sales of autos, telecommunications equipment and heavy machinery. Imports declined 0.8 percent to $225.3 billion. Economists note that the deficit would have grown much faster had it not been for a 6.5 percent drop in oil imports, largely reflecting cheaper global prices.
Prices have increased since then, while exports demand has dampened. "It won't be long before the deficit widens more significantly as the global slowdown takes a greater toll on U.S. exports," said Paul Dales, senior U.S. economist at Capital Economics.
Dales said trade will likely weigh on growth in the second half of the year.
** RRR = Risk Reward Ratio
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Written by Gary