September 17th, 2012
in Gary's blogging
Closing Market Commentary For 09-17-2012
By 1:30 I was wondering if everyone just went home as the volume trailed off to abysmal. The it sort of picked up that is if you consider anemic better than nothing. The melting was slightly down as it appeared something (algo computers) or someone was selling. The trend, if you can call it that, then melted up 5 points on the SP500 placing the numbers just about where it was at 1:30.
All in all this was a terrible market session but not as quiet as last Wednesday. Appeared to be some algo buying at the close but nothing of any consequences, except for oil plummeting, markets remained flat at the close.
I negated to mention previously when discussing 'issues' we face in the markets, near historical tops being one, was that the markets are overbought and a reversal is due. Here in the stocktiming.com chart this issue can clearly be seen.
“The 9 day C-RSI level for the NYA Index hit an overbought reading of +32.58 on Friday. This is combination with the NYA Index's daily tick being well outside the upper Bollinger Band, is an out-of-balance condition that will have to move lower to re-establish balance.”
NEW YORK (TheStreet) -- “The major U.S. equity averages were slumping Monday as the euphoria about the Federal Reserve's bold stimulus plans began to wear off.
Worries about the euro zone also soured investor sentiment as European Union leaders made little progress during weekend meetings to discuss the details of addressing the region's sovereign debt problems.”
The RRR** was very narrow at the opening bell and continuing through the afternoon session and any trades will probably end up on the unprofitable side as long as this market remains flat and with low volume. 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 at this point.
The DOW at 4:00 is at 13553 down 40.27 or -0.30%.
The 500 is at 1461 down 4.58 or -0.31%.
The $RUT is at 858.90 down 5.80 or -0.37%.
SPY is at 146.70 down 0.56 or -0.38%.
The trend is up and the current bias is sideways.
Markets Gone Wild “We just remind those 'trading' that with QEternity, all the good news 'help' is now out there - so what's left - jawboning Oil down.”
WTI oil is at 96.14 trading between 94.10 and 99.50 and the bias is negative.
Gold is down today at 1758.23, trading between 1776.00 and 1753.92 with a negative bias.
Dr. Copper is at 3.75 down from 3.81 earlier.
The US dollar fell from 79.17 earlier to 78.84 and is currently trading at 79.07.
The 500 at the close.
The DOW at the close.
Kathleen Brooks, research director at Forex.com, explains why recent central bank action may not be enough to propel the risk rally:
For the short term it is likely that the prospect of more QE from the Fed and loose monetary conditions should be able to sustain EURUSD above 1.30. But the life above this level is far from certain for this cross. Firstly there could be some doubt about the benefits of QE3, and secondly Spain could be a spanner in the works for the ECB’s latest attempt to stabilise this crisis.
The Eurozone finance ministers’ meeting this weekend passed off without Spain asking for a bailout. It is now unlikely to ask for a bailout before the regional elections next month. Added to this there is some concern that a pan-European banking union won’t be in place by January 1st, the original deadline, which is leaving investors’ worrying whether or not the
Eurozone authorities are really committed to the structural reform necessary to get the currency bloc out of the sovereign mess.
Angus Campbell at Capital Spreads, adds:
After the excitement of the market moves last week investors took a more demure approach to today’s session. The big rallies have proved hard to sustain and it is inevitable that at some point people would want to just take a little money off the table after such a strong move higher.
With the lack of any catalyst to keep the bulls interested too there was always going to be a respite at some point. There’s little direction being offered from economic data either, leaving the FTSE and its European counterparts to just drift sideways.
There are still other major risks to financial markets despite the best efforts by central banks to avert them. They remain the same old issues - a potential Chinese hard landing and a breakup of the eurozone.
With these problems still very much at the forefront of investors’ minds it will be very rare to see markets continue higher in a straight line.
** RRR = Risk Reward Ratio
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Written by Gary