Markets Ended Down Sharply, But Not Convincingly

October 9th, 2012
in Gary's blogging

Closing Market Commentary For 10-09-2012

For most of the afternoon session the averages moved sideways on anemic volume. By 3 pm that changed and the markets melted down below the morning low point. Volume was red and a tiny bit heavier, but the bears did take control.

I would point out the charts are a mess and little can be gleaned from them, but if there is any tea-reading possible I sure wouldn't have gone long today as I think there is more down to come, but not tomorrow. Just wish I could pin point the fall so I could make a fortune like the crooks that are currently in charge.

Follow up:

The 500 at the close. A trend was broken, but charts today are not that reliable.

The DOW at the close.

The RRR** was very narrow at the opening bell and continued into the closing session. Although a bit wider today than usual 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. Guessing where the market is going to be tomorrow or next week is a foolish endeavor.

The DOW at 4:00 is at 13473 down 110 or -0.81%.

The 500 is at 1441 down 14.40 or -0.90%.

The $RUT is at 827.92 down 10.49 or -1.25%.

SPY is at 144.22 down 1.42 or -0.98%.

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

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WTI oil is up today and is at 92.35 trading between 89.36 and 92.87 and the bias is positive.

Brent crude is up today and is at 114.43 trading between 112.00 and 114.50 and the bias is positive.

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Gold was down then back up this morning. Currently trading down at 1763.98, trading range is between 1760.75 and 1779.83 with a neutral bias.

Dr. Copper is at 3.72 down from 3.75 earlier.

The US dollar rose from 79.57 earlier to 80.19 and is currently trading at 80.19.


Gold futures remain within earshot of the key psychological and technical level of 1800, but have failed to break through.

Fundamentally, a stronger US Dollar and economic concerns have prevented prices from garnering enough momentum to finally break through the key level.

Equity prices also have hit a brick wall, offering no outside market support.

This is earnings season, which suggests that stock prices could be volatile in the weeks ahead. Technically, the 1800 mark is a barrier the market must pass through in order to keep upward momentum going.

Otherwise, prices could fall back sharply.

And with that said these new IPO's could have a difficult time.


A Surge In "Market Conditions" Imminent?

While hardly a crash, today's AAPL driven market swoon is certainly not the stuff centrally-planned market confidence is built on (not to mention yet another day of various abnormal stock trading patterns in some of the more retail-heavy held stocks which will hardly break the pattern of domestic capital flowing out of equities and into bonds).

And as we have seen in the past two weeks, when even green days have resulted in the infamous "market conditions" clause being triggered for companies attempting to sell equity or raise debt, today's red day, assuming of course, the fat pipe between Citadel and the FRBNY is not unclogged for the last hour of trading ramp, may mean that a surge of "market conditional" excuses by companies and underwriters is imminent.

The reason: as the WSJ reports there are no less than 10 IPOs in the next 3 days. Should today's market tone persist into the close, we would be very surprised if even half of these price in a market in which the primary market bid disappears on even a -0.01% close.

** RRR = Risk Reward Ratio

To contact me with questions, comments or constructive criticism is always encouraged and appreciated:

Written by Gary

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