October 8th, 2012
in Gary's blogging
Closing Market Commentary For 10-08-2012
Market closed at levels seen all day. Nothing very exciting as the averages ended the day flat, low volume and a very narrow trading range. The after market has shown some weakness as profit taking was on the rise. We will have to see what tomorrow has to say about this late revelation. In the past it didn't mean anything, so I expect it will be a non-event again.
One pundit said, “The weakness on Wall Street is partly due to negative sentiment generated by news that the World Bank cut its growth outlook for the East Asia region.” I hate to be the bearer of bad news, but the market is down because there is no one trading and the Columbus Day Holiday . I bet they never noticed the anemic volume that has plagued the market for the past 2 years. Today is not ANY different day for the past week, holiday or not.
The following article reflects my views, however I hold out a bit because of the QE3 influx. That made a difference before and may again. I would be cautious, very cautious at this point at entering the market if you are currently at cash.
In this Special Report we will attempt to explain why we believe the two major peaks in the S&P 500 of 1555 in 2000, and 1575 in 2007 will not easily be surpassed, as the severe debt burdens built up in the "financial manias" preceding those peaks still must be deleveraged.
We expect the latest move up in the S&P 500 from the March 2009 low will not exceed those peaks and will technically form a long-term triple top that will lead to the market declining to valuation levels similar to other secular bear market lows over the past 100 years.[More]
The RRR** was very narrow at the opening bell and remains so at the closing 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 DOW at 4:00 is at 13583 down 26.50 or -0.19%.
The 500 is at 1455.88 down 5.05 or -0.30%.
The $RUT is at 838.41 down 4.45 or -0.53%.
SPY is at 145.51 down 0.62 or -0.42%.
The longer trend is up, the past week's trend is neutral to bullish and the current bias is down to neutral.
WTI oil started down today and is at 89.65 trading between 89.90 and 88.20 and the bias is positive.
Brent crude also started down today and is at 112.17 trading between 112.23 and 110.54 and the bias is positive.
Gold was down today and finally rose. Now at 1775.05, trading between 179.42 and 1766.75 with a positive bias.
Dr. Copper is at 3.72 down from 3.76 earlier.
The US dollar rose from 79.40 earlier to 79.80 then fell and is currently trading at 79.68.
The 500 at the close.
The DOW at the close.
Whether it is a fringe-blog pointing out the statistical un-possibility (here and here), or a previously well-respected 'elite' pointing out the suspiciousness (here), most of the general public (or their media-based oracles) prefer not to swallow the red pill of reality with regard Friday's data SNAFU.
However, given the political (and economic) consequence of a single-number, Gallup has decided to weigh in on reality as they note "even though the Household survey tends to be very volatile, this decline seems to lack face-validity, particularly after the prior month's numbers" as they analyse why the household results should be discounted heavily.
Critically, they, like us, suggest the 'unemployment rate' needs to be replaced as a measure of joblessness, suggesting a far simpler (and more transparent) measure - Payroll-to-Population - would avoid the 'adjustments' and 'biases' that are inherent in the BLS's bafflement.
The Gallup measure suggests, as one would perceive using common-sense, that the real jobs situation was essentially unchanged last month.
A VERY interesting article on HFT. I would be interested in hearing from you on this.
** RRR = Risk Reward Ratio
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Written by Gary