October 19th, 2012
in Gary's blogging
Closing Market Commentary For 10-19-2012
By 12:20 the 'BTFD dippers' couldn't stand it anymore and jumped in showing a bit of green volume but by 1:30 the bears took over. From the 3 o'clock hour the bulls and the bears battled it out moving mostly sideways.
By the closing bell just about every average was seriously in the red and the volume remained low, but much higher than in previous sessions.
This is a very strange market and I don't like guessing with real money on the table. Normally I would “guess” that Monday will be an up day making any long trades today into some nice profit.
So far, the results have been mixed with 65% of companies beating profit estimates but only 42% beating on the topline. That said things are starting to take a turn for the worst.
Earlier this week, IBM reported revenue that missed analysts' expectations as sales slid 4% in the Americas and 9% in Europe, Africa, and the Middle East. Similarly, Intel (INTC) reported a 5% year-over-year drop in revenue and a 14% year-over-year decline in profit as PC demand crumbled.
Google missed everything when it (accidentally) reported midday Thursday, and Thursday evening after markets closed, Microsoft (MSFT) missed on both the top and bottom line blaming the 22% slide in revenue on consumers who are waiting on the roll out of Windows 8 and the Surface tablet to make new purchases.
The RRR** was very narrow at the opening bell and continuing into the closing hour, just as it has been doing for the past month. There was a nice jump, but that occurred in the premarket before the opening. Had you guessed the market was going to fall today, a short yesterday would have been an excellent trade. But there is that word again, “guessing”.
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 13343 down 205 or -1.52%.
The 500 is at 1433 down 24.15 or -1.66%.
The $RUT is at 821.00 down 16.12 or -1.93%.
SPY is at 143.10 down 2.69 or -1.84%.
The longer trend is up, the past week's trend is bearish and the current bias is down.
WTI oil was up today and is at 90.06 trading between 93.01 and 89.90 and the bias is negative.
Gold is down this morning. Currently trading down at 1721.62, trading range is between 1742.91 and 1715.66.70 with a negative bias.
Dr. Copper is at 3.63 down from 3.74 earlier.
The US dollar rose from 79.14 earlier to 79.74 and is currently trading at 79.69.
The 500 at the close.
The DOW at the close.
The $RUT at the close. The gap was closed and resuming up Monday is possible.
** RRR = Risk Reward Ratio
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Written by Gary