September 26th, 2012
in Gary's blogging
Closing Market Commentary For 09-26-2012
Markets closed down, flat and lackluster. Oh, did I mention the lack of volume? This entire session after 10 am was all about the HFT computers and manipulation of the markets. Financial reporting was bad this morning and the news emanating out of the EU is worse with riots in Athens and Madrid. The market weakness is apparent but if no one sells it isn't going to fall. In order to fall you have to have traders and they left over a year ago, so who is left. Good question and I know 'they' are not in any hurry to sell as basically there isn't anyone to sell to and that is a conundrum. I am losing hope for a bull run any time soon.
ATHENS/MADRID - Demonstrators clashed with police on the streets of Athens and Madrid on Wednesday in an upsurge of popular anger at new austerity measures being imposed on two of the euro zone's most vulnerable economies. Full Article | Video
The RRR** was narrow at the opening bell, but better than previous sessions. It widened as the morning advanced and at one point (11 am) was very good. That said, you had to have a crystal ball to predict that it was good. So for now we are back to guessing and that is not my preferred way to trade. Unfortunately 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 4:00 is at 13413 down 43.96 or -0.33%.
The 500 is at 1433 down 8.26 or -0.57%.
The $RUT is at 833.93 down 5.20 or -0.62%.
SPY is at 143.30 down 0.81 or -0.56%.
The longer trend is up, the past week's trend is neutral to bearish and the current bias is down.
WTI oil is down today and is at 89.96 trading between 91.35 and 88.90 and the bias is positive.
Brent crude is down today and is at 109.82 trading between 110.22 and 108.47 and the bias is positive.
Gold is down today at 1751.54, trading between 1764.50 and 1735.90 with a positive bias.
Dr. Copper is at 3.71 down from 3.75 earlier.
The US dollar rose from 79.72 earlier to 80.07 and is currently trading at 79.91.
The 500 at the close.
The DOW at the close.
It is about time that someone with 'gonads' took on these guys, er, computers. Then again, the SEC is a bunch of lawyers and not necessarily with any brains. Possibly crooked like their brethren, but not necessarily smart either.
The EU assembly just voted affirmatively to impose a spate of rules to control 'high-frequency-trading that, as the WSJ reports, was advanced by Germany following their concerns that speedy traders have brought instability to markets. It is somehow reassuring that three-years after we first brought HFT to the mainstream's agenda, at least one nation is taking it seriously, doing something about it, instead of being filibustered into the 'liquidity-providing' meme.
The rules will initially require registration, collect fees on excessive use of HFT methods, and install circuit breakers with the goals to "limit the risks associated with high-frequency trading" per a senior German FinMin; but the more stringent rules to come will have the greatest impact as they intend to include requirements for orders to rest on the exchange book for at least half-a-second, and potentially order-to-trade ratio caps.
Not surprisingly, the HFTs believe a "one-size-fits-all approach would be very harmful." Indeed - to their profits.
More here. Sounds like a teenager that has been grounded and squealing that it unfair.
** RRR = Risk Reward Ratio
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Written by Gary