Market Sharply Down But Relatively Low Volume

September 25th, 2012
in Gary's blogging

Closing Market Commentary For 09-25-2012

The markets never got traction today even though every time a dip would occur it looked like a fake-out. Nor was the decline all that spectacular percentage-wise. At 3:30 the DOW was only down 0.60% , the SP500 down 0.75% and the SPY was down the same at 75%. Yet the decline continued and was sharp without many pauses unlike previous sessions appearing to be more ominous that it really was. The averages did close down and the volume was light, however in line with total volume numbers of the past several sessions, but I wouldn't jump onto the bear's bandwagon just yet.

Follow up:

The Russell 2000 took the biggest hit at minus 1.48% but I do not see today any different than previous sessions that moved up 1.00% during one session. The single largest difference is that the red volume was greater than usual. If anything, today's melting down is more like a correction of some sort. Now if that 'correction' continues, that will be a different story of course.

The point is that today's decline is nothing to get excited about as tomorrow could just as easily inch back up on news. There is an old West proverb that you have to let go of the trigger before you can pull it again and it very well be what happens tomorrow.

The RRR** was very narrow at the opening bell but improved slowly as the session progressed. The ratio never improved to the point where on could feel comfortable jumping in in my opinion as each dip had all the makings of easing back up again. However any trades made today probably ended 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 market tomorrow is likely to be slower than usual because of Yom Kippur 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 4:00 is at 13457 down 101 or -0.37%.

The 500 is at 1441 down 15.30 or -1.05%.

The $RUT is at 839.12 down 12.64 or -1.48%.

SPY is at 144.35 down 1.30 or -0.89%.

The longer trend is up, the past week's trend is neutral and the current bias is down.


WTI oil is down today at 91.14 trading between 91.04 and 93.20 and the bias is negative.

Brent crude was up today then declined and currently is at 110.15 trading has been between 109.55 and 111.50 and the bias is neutral.

Gold also played the sea-saw today starting out at 1774.73 then went down to 1758.90 and is currently 1761.58 and with a negative bias.

Dr. Copper is at 3.74 down from 3.78 earlier.

The US dollar fell from 79.75 earlier to 79.38 this morning and recovered nicely and is currently trading back up at 79.72.

The 500 at the close.

The $RUT at the close.

The DOW at the close.

The DOW Transportation Index at the close. ($DTX) 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 discrepancies of the closing numbers is normal when taken close to the closing bell.)

** RRR = Risk Reward Ratio

To contact me with suggestions or deserved praise:

Written by Gary

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