October 17th, 2012
in Gary's blogging
Closing Market Commentary For 10-17-2012
The afternoon session largely was a sideways movement where the morning highs were never moved much in a narrow trading range. The DOW had the most trouble staying afloat and the low caps seemed to do well disregarding the gaps as the made moving up.
Averages melted up and down during the afternoon session on low volume and finally ended up flat as a pancake. Last minute green volume from the 'dippers' saved the DOW from turning in a negative number.
The latest bit of news flowing out of the EU is disturbing to say the least and we need to watch for the ramifications if this is found to be true.
. . . the latest development from the FT bears noting as it has major implications for Europe's make it up as you go along "recovery."
According to the FT: "A plan to create a single eurozone banking supervisor is illegal, according to a secret legal opinion for EU finance ministers that deals a further blow to a reform deemed vital to solving the bloc’s debt crisis.
A paper from the EU Council’s top legal adviser, obtained by the Financial Times, argues the plan goes “beyond the powers” permitted under law to change governance rules at the European Central Bank."
The punchline: "The legal service concludes that without altering EU treaties it would be impossible to give a bank supervision board within the ECB any formal decision-making powers as suggested in the blueprint drawn up by the European Commission.
The RRR** was very narrow at the opening bell and remained that way going into the midday mark, just as it has been for the past month. Any trades today will probably end up on the unprofitable side as long as this market remains flat or continues to have low volume.
I have issues with some traders in that they are saying there are setups for day trading. This is true enough, but the trading range is so narrow that way too money has to be put on the table just to get back meager gains.
Swing trading is also 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, at this time anyway, is a foolish endeavor.
The DOW at 4:00 is at 13557 up 5.22 or 0.04%.
The 500 is at 1460 up 5.99 or 0.41%.
The $RUT is at 842.51 up 7.07 or 0.85%.
SPY is at 146.23 up 0.69 or 0.47%.
The longer trend is up, the past week's trend is bearish to neutral and the current bias is up.
WTI oil was up today and is at 92.00 trading between 91.55 and 92.77 and the bias is neutral.
Gold was down this morning. Currently trading up at 1749.10, trading range is between 1753.12 and 1742.72 with a neutral bias.
Dr. Copper is at 3.75 up from 3.69 earlier.
The US dollar fell from 79.57 earlier to 78.96 and is currently trading at 79.06. (Gap starting at 79.41)
The 500 at the close. Looks like a trip top in the making.
The DOW at the close.
** RRR = Risk Reward Ratio
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Written by Gary