October 25th, 2012
in Gary's blogging
Closing Market Commentary For 10-25-2012
Earlier the DOW slipped below the 100 day MA, while the other major averages hovered just above it. Last week, the averages were descending below the 50 day MA and my comments were that we needed to rise back up if we were to see the markets recover. Now it is the same for the 100 day MA and this time around it isn't looking good folks.
Towards the late afternoon session today the averages recovered from the rumor that Finch was going to downgrade the US from its current AAA to where the markets are showing green but still down from the morning highs. This session marks the third in a row where the averages have remained in a tight narrow trading zone, literally moving sideways. Today's session ended, once again, looking like homely teenager girl; mostly flat and not very attractive.
Hugh Hendry has some thoughts here that may be worth paying attention to.
Hugh Hendry: "I have resigned from the professional undertaking of coin flipping. I am not here to tell you where gold’s going to be.
I have no idea. That’s my existentialism.
I am a student of uncertainty, I have no idea where the stock market is going to be.
So when I am creating trades in my portfolio for my clients, I am agnostic. I just want to enhance the probability that I make money come what may."
The RRR** was very narrow at the opening bell and continued into the closing session, 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 13103 up 26.65 or 0.20%.
The 500 is at 1413 up 4.24 or 0.30%.
The $RUT is at 816.81 up 3.16 or 0.39%.
SPY is at 141.41 up 0.39 or 0.28%.
The longer trend is up, the past week's trend is bearish and the current bias is bearish in sideways trading.
WTI oil was up this morning and is down at 86.18 trading between 85.25 and 86.76 and the bias is neutral.
Brent crude was up today and is at 108.56 trading between 107.50 and 109.25 and the bias is positive to neutral.
Gold was up this morning. Currently trading down at 1712.55, trading range is between 1700.00 and 1717.88 with a negative to neutral bias.
Dr. Copper is at 3.56 down from 3.59 earlier.
The US dollar fell from 80.16 earlier to 79.78 then rose again to 80.19 and is currently trading at 80.19 its current high for the day.
The 500 at the close.
The DOW at the close.
** RRR = Risk Reward Ratio
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Written by Gary