October 9th, 2012
in Gary's blogging
Midday Market Commentary For 10-09-2012
By 11 am the bears marched in and took charge melting the averages down in a meaningful way, BUT, the big but – the volume remains low although a bit higher that the normal. It appears the 2% are cashing in their chips ahead of AA's expected glum report report after the close.
By noon the moderate bearish action subsided and the averages started to move sideways, again on low volume. So far, the 2 day trend is down – will it continue?
What load of $%^&! US tax cheat Timothy G says, 'new measures' will take a long time to resolve today's issues. Well, that is because they won't work. They haven't work so far, what makes him think they will work in the future.
Timothy Geithner, the US Treasury Secretary, has been speaking to business leaders in New Delhi today. He told them that eurozone countries have a tough road ahead of them and it could take years for reform measures to "bear fruit".
Europe is "unlikely to be a support for the global economy for some years to come" even after new measures to combat the eurozone's debt problems and action by the European Central Bank to reassure financial markets, he said.
He added that the eurozone was on "a more promising path" to resolving its financial crisis, but warned there was "a very hard road ahead".
"The reforms and strategies they have put in place will take years and years to bear fruit... and it is likely to be a very, very challenging growth environment in Europe for a long period of time," he said.
The RRR** was very narrow at the opening bell and continued into the midday session. Although a bit wider 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 12:15 is at 13506 down 75 or -0.55%.
The 500 is at 1445 down 10.12 or -0.70%.
The $RUT is at 830.19 down 8.22 or -0.98%.
SPY is at 144.60 down 1.06 or -0.73%.
The longer trend is up, the past week's trend is neutral to bearish and the current bias is down.
WTI oil is up today and is at 93.32 trading between 89.36 and 92.40 and the bias is positive.
Brent crude is up today and is at 114.39 trading between 112.00 and 114.45 and the bias is positive.
Gold was down then back up this morning. Currently trading down at 1766.58, 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 80.16 and is currently trading at 80.08.
It will be interesting to see what the market does in tomorrow's opening after AA reports after the close. Low volume has skewed numbers around lately and become extremely difficult to 'guess' what the appropriate trading response should be. Normally I would be selling today and buying back tomorrow when it is down. Today . . who knows? 'Who cares' is a bit too strong, but I am getting there.
Alcoa earnings seen plunging as earnings season kicks off. Alcoa (AA) is set to get earnings season underway later today, with analysts predicting that Q3 EPS sank to $0.01 from $0.15 a year ago and that revenue slumped 13.2% to $5.57B. While Alcoa is seen as a barometer for global manufacturing, FactSet says it's not a good indicator of how S&P 500 results will turn out. Since 2009, when Alcoa missed consensus, 72.4% of component companies beat profit estimates.
You knew it was coming. When there is no money in the bank, or at least that is what they say, 'they' always as you to bend over even though they were the ones causing the problem in the first place.
IMF warns eurozone to take haircut on Greek debt. The IMF is threatening to cut its financing to Greece unless eurozone countries take haircuts worth tens of billions of euros on the country's debt, the WSJ reports. The eurozone is resisting the IMF's suggestions, which include having the ESM take on Greek debt of $50B, a move that could slash the country's burden by 15%-20% of GDP.
** RRR = Risk Reward Ratio
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Written by Gary