October 31st, 2012
in Gary's blogging
Opening Market Commentary For 10-31-2012
Markets opened up as the prremarket predicted, but no higher than last Thursday's high indicating a resistance of sorts. The DOW and the SP500 melted up while several ETF's indicated the markets were going to turn south soon. There were so many conflicting indicators that determining a bias one way or another was impossible during the first 15 minutes after the opening. The volume was switching back and forth between red and green, obviously the active trades were confused too.
Finally the DOW and the 500 started melting down slowly loosing their morning gains, all of this 'action' under low volume. By 10 am the bears were showing their teeth, but the 'BTFD dippers' hadn't seen the memo yet and continued to hang in there. The bulls push upward is being stymied by the persistent bears and one can only guess where the averages are going to be at 4 pm.
The Chicago PMI Manufacturing report, that was supposed to have been issued yesterday, misses forecasts at 49.9 versus 51.0 expected but slightly above September's 49.7 adding some fuel to the bears campfire.
Some of the pundits out there still do not get it. The volatility some were expecting this morning is not realistic considering MOST investors left the market place over a year ago. What is left is the '2% crowd' and they CAN'T move the markets more than 2%. The fund managers are not going to anything if they don't have too and the HFT computers are the only ones left jerking the numbers around. CNBC headlined this, Expect a Wild Session as Wall Street Opens: Pro. One of the reasons I ignore the 'Confused Neurotic Broadcast Company' .
The RRR** was very narrow at the opening bell, just as it has been for the past month. 'Guessing' during last Friday's closing hour what the market was going to do on Monday, err Tuesday, Wednesday would have brought in a nice profit. 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 10:15 is at 13157 up 51 or 0.40%.
The 500 is at 1414 up 2.74 or 0.19%.
The $RUT is at 814.61 up 1.36 or 0.17%.
SPY is at 141.59 up 0.25 or 0.18%.
The longer trend is up, the past week's trend is bearish to neutral and the current bias is down.
WTI oil was up today and is at 86.14 trading between 85.60 and 86.56 and the bias is negative.
Brent crude was up today and is now down at 109.10 trading between 108.85 and 109.80 and the bias is negative.
Gold is up this morning. Currently trading neutral at 1719.89, trading range is between 1709.10 and 1722.00 with a positive bias.
Dr. Copper is at 3.54 up from 3.51 earlier.
The US dollar fell from 80.05 earlier to 79.72 and is currently trading at 79.90.
** RRR = Risk Reward Ratio
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Written by Gary