Markets Melting Lower On Low Volume

October 26th, 2012
in Gary's blogging

Midday Market Commentary For 10-26-2012

The averages jumped around this morning but with lower highs and lower lows as the averages slowly melt down on anemic volume as we head into the weekend of serious doubt.

All of the major averages are in the red and apparently headed lower as the afternoon session wears on. I am expecting the markets to level out and perhaps rise off the lows of the day. Unless there is significant new sneaking out of the EU, it will be a good day to get in an afternoon of golf.

Follow up:

I would be careful of the 'BTFD dippers' jumping in and raining on your parade if you are thinking of shorting. I do not foresee a waterfall drop or anything more than a 2% IF that much, so plan accordingly as we have the weekend ahead too.

The RRR** was very narrow at the opening bell, just as it has been for the past month. Any trades today will 'could' end up on the unprofitable side as long as this market remains flat or continues to have low volume, today may be different. If you had guessed AAPL was going to tank and shorted the market before the close yesterday, your profits this morning would be very nice. But there is that guessing thing again.

I have issues with some traders in that they are saying there are setups for day trading. This is true enough, but the day trading range has been so narrow that way too money had 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 12:15 is at 13054 down 50.00 or -0.38%.

The 500 is at 1404 down 8.22 or -0.58%.

The $RUT is at 808.37 down 8.42 or -1.03%.

SPY is at 140.63 down 0.82 or -0.58%.

The longer trend is up, the past week's trend is bearish and the current bias is down.

World's spare oil capacity rises, but so do Iranian exports.

WTI oil was up today and is at 85.76 trading between 84.98 and 86.33 and the bias is negative.

Why Have Oil Prices Fallen To $85?

Brent crude was up today and is at 108.80 trading between 107.40 and 109.01 and the bias is negative.

Gold was down this morning, now it has turned up. Currently trading up at 1714.27, trading range is between 1701.05 and 1716.98 with a neutral to bearish bias.

Dr. Copper is at 3.55 up from 3.53 earlier.

Euro Troubles Stirring after News that Greece Needs €30 Bln More. (PDF)

The US dollar rose from 79.90 earlier to 80.37 and is currently trading lower at 80.16 after rising from 80.00 just a little while ago.


China loses trillions in illegal outflows.

China hemorrhaged $3.79T in money that was smuggled out the country between 2000 and 2011, research and advocacy group Global Financial Integrity estimates. The pace of the outflow, which comes from corruption, crime or tax evasion, is speeding up. In contrast, legal foreign direct investment was $310B. "The social, political, and economic order is not sustainable in the long-run given such massive illicit outflows," says GFI.

** RRR = Risk Reward Ratio

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Written by Gary

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