November 2nd, 2012
in Gary's blogging
Midday Market Commentary For 11-02-2012
All morning the averages turned in continuing lower numbers as the markets melted down on low volume. By noon they had leveled out for a breather and volume dipped lower. Afternoon bullish action is believed to be muted in light of EU developments over the weekend.
Averages are generally in the red, but flat.
The RRR** was very narrow at the opening bell, just as it has been for the past month. We had a nice jump upwards if you were inclined to 'guess' the market was going to be up this morning. However, 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 12:15 is at 13187 down 43 or -0.33%.
The 500 is at 1425 down 2.69 or -0.19%.
The $RUT is at 821.48 down 6.37 or -0.77%.
SPY is at 142.62 down 0.22 or -0.15%.
The longer trend is up, the past week's trend is bearish and the current bias is down.
WTI oil was down earlier today and has since moved back up and is down again at 85.37 trading between 87.05 and 85.13 and the bias is negative.
Brent crude is up today and is at 106.67 trading between 106.62 and 108.80 and the bias is negative.
Gold gaped down this morning in an unusual bearish move. Currently trading down at 1682.34, trading range is between 1683.90 and 1716.50 with a negative bias.
Dr. Copper is at 3.49 down from 3.56 earlier.
The US dollar rose from 79.92 earlier to 80.67 and is currently trading at 80.62. It did gap up from 80.40 to 80.47 and I expect that gap to be closed probably today sometime.
You read about it here first. Now it is time for the sellside (whose products your soft dollars so generously fund) to wake up to what is happening next week.
And back to Greece. Pimco's managing director Andrew Bosomworth has said the ECB may have to take losses on its Greek sovereign bonds because the country is unlikely to repay its debt in full, reports Bloomberg.
"At the end of the day it's the Greek government's decision, therefore the ECB might unwillingly accept that it doesn't get everything back," Bosomworth said in an interview in Riga, Latvia, today.
"Its extremely difficult to see any way, any possibility how the country pays back its debt without receiving assistance in the form of debt relief.
"Greece is insolvent and it's going to default. It's just a question of how and when that is realized."
** RRR = Risk Reward Ratio
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Written by Gary