September 25th, 2012
in Gary's blogging
Opening Market Commentary For 09-25-2012
Premarket averages melted up from yesterday's closing numbers to within a point of yesterday's highs. By the opening bell the SP500 futures had moved off and down from the morning high point showing some bearish signs. Because of the low volume numbers that persist, investors sitting on the sidelines can not reliably count on the markets to move in rational ways because of the manipulations of the HFT computers.
By the 10 minute mark the volume was low, red and lackluster. Investors waited for the 10 am reporting of the high rated Consumer Confidence that rose to 70.3 expecting 63.1 and medium rated House Price Index rose 0.2% while expecting 0.6%. Market reaction was watching the SP500 move up 2 points and stall after the financial news.
Initial green volume was very low and melted the averages subtle higher and then the volume dropped of the face of the Earth and turned red, then green and then green just before it turned red again. It appears that I have been right in predicting that there will not be any big 2% moves on any news, 'smashingly' good or abominable. Until the HFT computers, Wall Street bad guys, Dark Pools and other market manipulators are reigned in. The 'sheeple' along with maw and pop investors are going to stay far away from this market place and protect what they have left.
US markets opened flat within yesterday's closing zone in the absence of important economic data to move the markets. The headlines for today are not inspiring to help the bears much as Merkel rejects Eurobonds, IMF´s Lagarde admits Greece must do more, German Schaeuble says Europe economic condition weakening a little bit and the Spanish bond auction results worse than expected.
I mentioned in my article on Investment Strategies And Pitfalls For Sheeples that the best advice I haven't seen and currently subscribe to for the 'Sheeples' is simply, DON'T INVEST AT ALL. Larry Doyle writes today The Best Investment Advice Ever: Saying “No” still reigns high in my estimation of today's market. Better days are coming for investing, just not today.
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 markets are likely to be slower than usual because of Yom Kippur tomorrow and would advise anyone with dollars in their pocket that are hot to trot, wait-and-see for a few more days before taking the jump.
The DOW at 10:15 is at 13610 up 51 or 0.37%.
The 500 is at 1461 up 4.85 or 0.33%.
The $RUT is at 856.29 up 4.59 or 0.54%.
SPY is at 146.07 up 0.43 or 0.30%.
The longer trend is up, the past week's trend is neutral and the current bias is up.
WTI oil is up today at 92.97 trading between 91.80 and 93.20 and the bias is positive.
Brent crude is up today at 111.26 trading between 109.55 and 111.35 and the bias is positive.
Gold is up today at 1773.78, trading between 1761.75 and 1774.73 with a positive bias.
Dr. Copper is at 3.76 up from 3.74 earlier.
The US dollar fell from 79.75 earlier to 79.37 and is currently trading at 79.44.
With global growth slowing, global trade tumbling, and earnings revisions falling rapidly, equity market outperformance has been (as we noted earlier) based on the Fed/ECB's largesse. The unanswered question is - how much is now priced in?
Given recent 'stability' post-FOMC, it seems the follow-through is not there (especially if we look at sectoral performance) and based on David Rosenberg's estimate of Fed QE's impact on stocks, we think we know why.
In the last three months, the S&P 500 has 'outperformed' the Fed balance sheet by around 220 points - which equates to a pricing-in of around 11 months of additional QEternity.
** RRR = Risk Reward Ratio
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Written by Gary