Continued Melting Down Sees New Lows

November 8th, 2012
in Gary's blogging, market close

Closing Market Commentary For 11-08-2012

Markets continued to melt down during the afternoon session and only the Russell broke down below its channel. However, I do not see that as a game changer as it is still not clear if we are in a bear market or a simple correction.

The markets closed lower on concerns of the fiscal cliff and serious doubts that the newly re-elected Obama Administration can successfully tackle the fiscal problems facing the United States.

Follow up:

The issues facing the Obama Administration are huge and many think insurmountable for the Keynesian lawmakers.

What Now For The Markets?

. . . Mr. Market couldn't decide if another four years of the Obama Administration was good or bad.

Here is what I am watching. The graph below of the relative performance of SPY, representing equities and the risk-on trade, against TLT, representing long Treasuries and the risk-off trade, is forming a wedge - a sign of indecision for technicians. (Read More)

FX Trading Volume Plunges In Disgust Over HFT Dominance

The RRR** was very narrow at the opening bell continuing to the closing bell, 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 as the markets are currently untradable. 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 12811 down 121 or -0.94%.

The 500 is at 1377 down 17.02 or -1.22%.

The $RUT is at 793.65 down 10.87 or -1.35%.

SPY is at 138.13 down 1.60 or -1.12%.

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

How Oil Really Gets Priced

WTI oil was up today and is trading at 85.01 trading between 84.50 and 85.69 and the bias is negative.

Brent crude was up today and is at 107.12 trading between 106.80 and 108.16 and the bias is neutral.

Gold is choppy this morning. Currently trading up at 1732.45, trading range is between 1713.15 and 1734.90 with a positive bias.

Dr. Copper is at 3.47 up from 3.44 earlier.

The US dollar fell from 81.10 earlier to 80.88 and is currently trading at 80.89.

The 500 at the close.

The DOW at the close.

Joke for the day.


** RRR = Risk Reward Ratio

To contact me with questions, comments or constructive criticism is always encouraged and appreciated:

gary@econintersect.com

 

Written by Gary















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