October 10th, 2012
in Gary's blogging
Closing Market Commentary For 10-10-2012
By 1 pm the markets stopped their decent and leveled out for the rest of the session. Red volume for this and yesterday's session has been heavier than usual, but still regarded low suggestion that only the 2% are doing any trading.
The selling was mostly registered in the large caps for the second day for various reasons only the crystal ball pundits can understand. We should have seen this action months ago. The selling pressure is there but the averages are not doing anything.
This bit from London also applies to the US markets as well.
The European markets have closed for the day, making losses for the third consecutive session. Angus Campbell, head of market analysis at Capital Spreads, said:
Equity markets have done nothing but grind gradually lower in the past few days as the economic outlook both domestically and outside of the UK has deteriorated. Investors are struggling to find any rational reasons to considerably increase their exposure to equities when there are people left right and centre warning them of stormy waters ahead.
Even though our own Prime Minister in his speech to the party faithful attempted to sound as optimistic as possible about the future prospects for the UK economy, but the rather morose undertones poured a bucket of cold water on any reasons to celebrate.
Whilst the bulls seem incapable of lifting us higher, the bears are also unable to take control and push us significantly lower. Every time there’s a bit of bad economic data we should be seeing markets take a dive, but the prospect of more stimulus from central banks around the world seems to be creating rather a false environment.
Stocks have moved modestly lower in early trading on Wednesday, adding to the steep losses posted in the previous session. The major averages have slipped into negative territory, although selling pressure remains relatively subdued.
. . . weakness on Wall Street reflects lingering concerns about the outlook for the global economy following disappointing guidance from aluminum giant Alcoa (AA).
The RRR** was very narrow at the opening bell continuing into the closing session. Any trades will probably end up on the unprofitable side as long as this market has low volume or 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 at this point in time.
The DOW at 4:00 is at 13345 down 128 or -0.95%.
The 500 is at 1432 down 9 or -0.62%.
The $RUT is at 826.75 down 1.17 or -0.14%.
SPY is at 143.18 down 1.02 or -0.71%.
The longer trend is up, the past week's trend is neutral to bearish and the current bias is bearish.
The 500 at the close.
The DOW at the close.
The $RUT at the close.
The Nas and Russell could be considered to be trading in falling rectangles within uptrends – these are bullish, but one more down day will negate the bullishness. Obviously the lower lows from the Nas and Russell concern me the most. If the small caps lag, the market will not rally. Simple as that.
WTI oil was up today and is at 91.34 trading between 91.15 and 93.35 and the bias is negative.
Brent crude was up today and is at 114.43 trading between 113.78 and 115.55 and the bias is negative.
Gold was down then back up this morning. Currently trading at 1762.81, trading range is between 1757.34 and 1767.90 with a neutral bias.
Dr. Copper is at 3.72 up from 3.70 earlier.
The US dollar fell from 80.30 earlier to 79.94 and is currently trading at 80.00.
A bit over the top and conspiratorial, but an interesting read.
Everyone knows that a major reason for the dominant position of the USA after World War II was that Europe and Asia were left in rubble. The 8th Air Force in Europe and the 20th Air Force in the Pacific did a thorough job. “Bomber” Harris of England pitched in, and Curtis LeMay’s B-29 fire bombings in Japan were so effective that Hiroshima and Nagasaki were spared so that the new atomic weapons would have pristine targets.
When peace arrived in 1945, the Cold War suddenly broke out, and that took Russia, East Europe, and China out of the picture.
Combined with a strong dollar that was much in demand and a matchless military, US manufacturing made the transition from war to peace and emerged stronger than ever. This enabled the post-WWII US economic boom. (More)
** RRR = Risk Reward Ratio
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Written by Gary