September 24th, 2012
in Gary's blogging
Closing Market Commentary For 09-24-2012
The afternoon session continued to show a bearish lackluster slant. Traders expressed continued concerns about the outlook for the global economy it seemed. The major averages slid into negative territory on the opening and then rose to Friday's closing numbers and melted down again, adding to the modest losses posted last week. The continuing weakness on Wall Street is partly due to troubling news from overseas, including remarks from an adviser to the People's Bank of China predicting that China's economic slowdown will continue and that some think Germany is headed for a recession.
By 4 pm the HFT computers had melted the numbers back up again and then down all within a narrow trading range.
The RRR** was very narrow at the opening bell continuing into the closing bell and any trades today 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.
However, if you have a position, I would remain cautious as sudden market movements are not uncommon after long sideways movement and could be disastrous to anyone caught asleep at the wheel.
The DOW at 4:00 is at 13558 down 20.55 or -0.15%.
The 500 is at 1456 down 3.26 or -0.22%.
The $RUT is at 851.76 down 3.75 or -0.44%.
SPY is at 145.61 down 0.25 or -0.17%.
The longer trend is up, the past week's trend is neutral and the current bias is down.
The 500 at the close.
The DOW at the close.
“According to the basic version of this theory, if the Dow Jones Transport Average fails to confirm the strength of the Dow Jones Industrial Average, the market is headed for a correction. Industrials hit a fresh high Sept. 14 of 13,682 points. Dow transport stocks not only failed to confirm the gain, they lurched decidedly lower.”
The DOW Transportation Index. ($DTX)
WTI oil is down today at 91.97 trading between 93.00 and 91.00 and the bias is neutral.
Brent crude is down today at 109.78 trading between 111.53 and 108.78 and the bias is neutral.
Gold is down today at 1764.89, trading between 1772.10 and 1755.85 with a neutral bias.
Dr. Copper is at 3.74 down from 3.77 earlier.
The US dollar rose from 79.40 earlier to 79.82 and is currently trading at 79.59.
Never try to teach a pig to sing, advised Robert Heinlein. It wastes your time and it annoys the pig.
Similarly, never try to convince a central banker that his policies are destructive.
After five years of enduring crisis, market prices are no longer determined by the considered assessment of independent investors acting rationally, but simply by expectations of further monetary stimulus.
So far, those expectations have not been disappointed. The Fed, the ECB and lately even the BoJ have gone “all- in” in their fight to ensure that after a grotesque explosion in credit, insolvent governments and private sector banks will be defended to the very last taxpayer.
Conventional wisdom is that such moves are justified during this period of economic slowdown, as everyone agrees that the market is ’deleveraging’. But as the consistently excellent Doug Noland points out, this idea of deleveraging (i.e. reduction of available credit) in the US is a myth.
** RRR = Risk Reward Ratio
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Written by Gary