October 12th, 2012
in Gary's blogging
Closing Market Commentary For 10-12-2012
Markets continued trading sideways during the afternoon session with averages sneaking below yesterday's lows. Impossible to glean anything out of the charts as most have been trashed because of the continuing low volume and the self serving antics of the HFT computers. If anything it appears we are resting at another support of moderate strength. (See DOW and $RUT charts below)
The 50 day SMA seems to be what what most analysts are look at today as the Russell 2000, SP500, NASDAQ and SPY all closed below this mark.
Beneath a façade of tedious price action, U.S. stocks appear to be weakening by the hour. Yesterday, for instance, the Dow couldn’t even muster a 100-point boost on news that jobless claims had fallen by 30,000 in the week ended October 6.
Earlier this year, before our perennially recovering economy encountered some stiff recessionary headwinds, that stat would have been worth at least 150 Dow points on the opening.
This time around, though, DaBoyz could milk only a paltry 84-point gain from it. When a second-wind flurry of buying failed to drive the blue chip average any higher, it was time to unload.
We said so in the Rick’s Picks chat room at the time, noting that the rally felt “doomed,” as it indeed was. Have investors finally figured out that virtually all employment-related statistics, especially so close to the election, are economically meaningless at best » Read the full article
The RRR** was very narrow at the opening bell and remained that way through the closing bell. 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.
Building your account is a two step process. 1) You gotta seize opportunities when they’re given – make money when making money is easy. 2) Don’t give profits back when the personality of the market shifts and trading becomes much more difficult. There are no bonus points to navigating a difficult market. Most traders would be better off heading to the sidelines when the market changes. It’s the baseball equivalent of “swing at good pitches, don’t swing at bad pitches.”
The DOW at 4:00 is at 13328 up 2.46 or 0.02%.
The 500 is at 1428 down 4.25 or -0.30%.
The $RUT is at 823.09 down 6.69 or -0.81%.
SPY is at 142.76 down 0.60 or -0.41%.
The longer trend is up, the past week's trend is neutral to bearish and the current bias is down. U.S. stocks end worst week in four months
The 500 at the close. S&P Futures Break 50DMA
The DOW at the close.
The $RUT at the close.
WTI oil is neutral today and is at 91.55 trading between 92.60 and 91.18 and the bias is negative.
Brent crude is mostly down today and is at 114.55 trading between 115.93 and 113.94.25 and the bias is negative.
Gold was up then back down this morning. Currently trading down at 1753.85, trading range is between 1772.58 and 1752.65 also with a negative bias.
Dr. Copper is at 3.69 down from 3.75 earlier.
The US dollar fell from 79.90 earlier to 79.58 and is currently trading at 79.75.
AAPL slumbered today (fading at VWAPs) and GOOG stumbled on FTC settlement chatter - dragging Nasdaq to its biggest weekly loss in almost 5 months.
Financials were also sold hard (following what every talking head said was 'good' earnings by JPM and WFC this morning) - leaving the sector down 3.7% from post-QEternity highs with previous darling WFC slapped down to BofA/MS levels post-QE -6.5%.
Dow Transports outperformed its peers on the week (ending very slightly red) but this remains more a pairs-trade story than anything to hang a 'recovery' on. The S&P has auctioned back to the top of the post-Draghi spike - battle is commencing.
Treasury yields legged down once again (long-bond down 18bps on the week at lows) but pulled off the lows after Europe closed -5bps to -14bps as the curve flattened. The USD limped lower for the last few days but ended the week +0.45%.
While Oil managed a 2% rise on the week, we saw commodities getting sold today with Gold/Silver sliding (-1.44% and 2.9% respectively on the week). After an early spike down, VIX leaked back higher all day ending at the magical 16% level - up 1.5vols on the week.
** RRR = Risk Reward Ratio
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Written by Gary