September 19th, 2012
in Gary's blogging
Opening Market Commentary For 09-19-2012
Premarket was a teaser as it crept upwards before the opening bell this morning. The Housing Starts created a minor elevation for the SP500 futures bumping it up 1 point or so and remaining there until the opening. There is little news and the markets have not changed. If the volume continues to remain low I would expect the HFT crowd to play around and we should see a sideways meandering of little consequence.
The market opened flat with the DOW up 20, the 500 up 1.00 and most of the averages barely in the green. The immediate market direction appeared bearish and by the 10 minute mark the averages stared to fall over to the red side of the ledger on low volume.
By 10 am the averages were still flat and exactly where they were yesterday. By 10:05 the 'dippers' decided to jump in and melt the markets up slightly. My bet is another lackluster session, low volume and a narrow trading range.
More on Housing Starts: At 550K, the number of single-family starts hit a 28-month high in August, and were up 26.8% Y/Y. A look at a long-term chart shows starts and permits continue below the levels associated with recessions in the past.
“The economy will likely benefit if home prices continue to rise. When that happens, Americans typically feel wealthier and boost consumer spending, which drives 70 percent of growth.
Even with the gains, the housing market remains weak. Many would-be buyers are having difficulty qualifying for loans or can't afford the larger down payments being required by banks.
Though new homes represent less than 20 percent of the housing sales market, they have an outsize impact on the economy. Each home built creates an average of three jobs for a year and generates about $90,000 in tax revenue, according to the NAHB's data.”
The RRR** was very narrow at the opening bell and any trades will probably end up on the unprofitable side as long as this market has low volume and 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 10:15 is at 13598 up 34 or 0.25%.
The 500 is at 1461 up 2.00 or 0.15%.
The $RUT is at 858.18 up 1.22 or 0.14%.
SPY is at 146.81 up 0.19 or 0.13%.
The trend is neutral and the current bias is neutral.
WTI oil is at 92.74 trading between 96.10 and 92.50 and the bias is negative.
Gold is down today at 1768.11, trading between 1779.00 and 1762.68 with a neutral bias.
Dr. Copper is at 3.80 down from 3.84 earlier.
The US dollar rose from 79.15 earlier to 79.48 and is currently trading at 79.26.
** RRR = Risk Reward Ratio
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Written by Gary