October 18th, 2012
in Gary's blogging
Midday Market Commentary For 10-18-2012
US Leading Indicators rose along with the US Philadelphia Fed at 10 am. The averages bumped up to yesterday's closing and then melted back to where they were. The 'dippers' did jump in at that time showing some heavier than usual green volume, but he bears refused to let them climb. By 10:20 a decent started but the HFT computers melted it back up on low volume. By noon most averages turned green but flat. Only the $RUT remained in the red.
The US Philadelphia Fed. Rose to 5.7 vs. 1.0 expected and -1.9 prior.
The ridiculous economic data continues. Those looking at the headline Philly Fed, which jumped from -1.9 to 5.7, trouncing expectations of 1.0, such as the NY Fed's Simon Potter are pushing buy buttons left and right.
And yet anyone who takes the 2 minutes to look at the internals, such as the collapse in the Number of Employees Sub-Index, which tumbled from -7.3 to -10.7 (the lowest since September 2009), the decline in the Average Employee Workweek, or the surge in Prices Paid from 8 to 19, double the change in Prices Received which means plunging corporate profits, or the ever critical New Orders which declined from 1.0 to -0.6, and one can see why this is a report only an Econ Ph.D-cum-Central Planner can love.
Finally adding insult to injury, is the 6 month forecast, which unlike all other regional Fed diffusion indices, collapsed by half, from 41.2 to 21.6, as the Hopium at least in the city of brotherly mugging appears to be running out. Stocks kneejerk in every possible direction hoping the Fed will provide a direction.
The RRR** was very narrow at the opening bell continuing 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 12:00is at 13586 up 30 or 0.21%.
The 500 is at 1463 up 2.94 or 0.20%.
The $RUT is at 842.31 down 0.21 or -0.02%.
SPY is at 146.49 up 0.29 or 0.19%.
The longer trend is up, the past week's trend is neutral to bearish and the current bias is up.
WTI oil is down today and is at 91.68 trading between 92.20 and 90.73 and the bias is positive.
Gold is down this morning. Currently trading up at 1745.95, trading range is between 1752.00 and 1738.08 with a positive bias.
Dr. Copper is at 3.75 down from 3.76 earlier.
The US dollar rose from 78.96 earlier to 79.28 and is currently trading at 79.16.
More bad news about the global economy: Growth slowed last quarter in China to its lowest level since early 2009
** RRR = Risk Reward Ratio
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Written by Gary