October 4th, 2012
in Gary's blogging
Midday Market Commentary For 10-04-2012
About 10:30 the averages started to melt down as expected to levels just above being flat. The news coming out of the EU is still dismal at least uninviting from an investors standpoint. The volume remains anemic and by noon the trend certainly appeared to be negative, but the HFT computers will probably change that in short order. No one is trading, yet the markets can mysteriously melt up, or down as the case may be. The markets are directionless, volume is low and the trading range remains very narrow.
The RRR** was very narrow at the opening bell and has continued through the midday session. 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 12:00 is at 13558 up 64 or 0.48%.
The 500 is at 1458 up 7.21 or 0.50%.
The $RUT is at 837.17 down 1.60 or -0.19%.
SPY is at 145.82 up 0.73 or 0.50%.
The longer trend is up, the past week's trend is neutral to bullish and the current bias is down.
WTI oil is up today and is at 89.88 trading between 87.92 and 89.95 and the bias is positive.
Brent crude is up today and is at 110.28 trading between 108.02 and 110.35 and the bias is positive.
Gold is up today at 1791.19, trading between 1776.50 and 1794.62 with a positive bias.
Dr. Copper is at 3.78 down from 3.81 earlier.
The US dollar fell from 79.96 earlier to 79.48 and is currently trading at 79.49.
More on the sad state of affairs. The bulls I think are on the wrong side of the equation as Dough Short tells it like it is. My wife and I were just discussing this reality and overall we are down about 30%, not complaining, just the reality of the times.
In summary... as the excellent data from Sentier Research makes clear, the mainstream U.S. household was struggling before the Great Recession. At this point, real household incomes are in significantly worse shape than they were over three years ago when the recession ended. The sorry state of median household incomes will no doubt be an "elephant in the room" at the outset of tonight's first of the three 2012 presidential debates. And please note -- the metaphorical elephant I'm referring to is definitely not the Republican mascot.
** RRR = Risk Reward Ratio
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Written by Gary