November 15th, 2012
in Gary's blogging
Opening Market Commentary For 11-15-2012
The premarket was mixed and choppy making a Ha Ha (prediction) impossible continuing the trend of mixed signals early on in the session. The oils, gold and copper are all over the charts prior to the opening bell, leading one to speculate indecisively on today's session outcome. Used to be that the 'big boys' would set the tone for the day in premarket action, but those days are long gone.
The opening was even with yesterday's close and remained flat for the first 10 minutes. Gradually the averages melted up under very low volume indicating most traders were sitting on the sidelines waiting for a signal to buy or short.
By 10 am the appearances (low volume) that this is going to be a quiet day and somewhat a narrow trading session, but we all know that what we see now can drastically change in a blink of an eye.
The mornings action was a feeble attempt of the 'dippers' looking for some bargains, but it looks like all they got was some sour grapes.
Leavitt wrote this morning and I agree, “The market is practically in free-fall mode. The index charts are a mess, and charts of individual stocks are, in many cases, much worse off. This isn’t always the case. Often the indexes mask what’s going on beneath the surface. Not right now; everything is ugly.
Don’t step in front of this runaway freight train. The trend is down. Sentiment is down. The mood is very negative. But the breadth indicators haven’t washed out yet. Unfortunately for the bulls, that means we need more downside movement before a decent bounce can play out. If you’re short, don’t get cocky. The biggest up moves occur within downtrends. When the market does bottom – even if it’s only a temporary bottom – expect a forceful and energetic move.”
The first column (chart below) is what was reported this morning. The second is what was forecast and the third is the last report. The numbers are not enough evidence for me to support a shorting spree here in spite of very negative numbers from the EU and serious concerns of the US 'fiscal cliff' issues that loom just ahead.
The EU has officially entered a recession, will the US follow suit?
Eurozone enters double-dip recession. Eurozone GDP contracted by an expected 0.1% on quarter in Q3 after falling 0.2% in Q2, marking the bloc's entry into its second recession since 2009. Germany's growth fell to 0.2% from 0.3%, [signaling] that the eurozone's debt crisis is fast catching up with the country, with Commerzbank economist Joerg Kraemer forecasting that GDP will shrink in Q4. On the bright side, France's economy expanded 0.2% vs expectations for zero growth.
The RRR** was inviting at the opening bell, but not wide enough to want to take a chance of being on the wrong side of a trade. Yesterday for example, the premarket was up and with higher than usual volume indicating a possible gap up. As we all know now that would have been a very unprofitable move had anyone acted on that and gone long.
Way too much guessing is required and any trades today could end up on the unprofitable side as long as this market continues to have low volume. Low volume is the key here as the averages CAN be manipulated by the HFT computers. Large blocks may also have difficulty in completing the desired numbers with low volume.
I also 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 sometime 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. Yesterday I 'guessed' that the markets could be up after 2 days of below normal numbers.
The DOW at 10:00 is at 12538 down 31 or -0.25%.
The 500 is at 1353 down 2.00 or -0.15%.
The $RUT is at 770.68 down 2.54 or -0.33%.
SPY is at 135.75 down 0.12 or -0.10%.
The longer trend is up, the past week's trend is bearish and the current bias is down.
WTI oil was up today and is currently trading down at 86.14 trading between 86.09 and 86.82 and the bias is negative.
Brent crude was up today and is currently trading down at 110.84 trading between 109.60 and 111.12 and the bias is negative.
Gold is down this morning. Currently trading down at 1711.54, trading range is between 1727.51 and 1706.00 with a negative bias.
Dr. Copper is at 3.46 down from 3.47 earlier.
The US dollar rose from 81.09 earlier to 81.24 and is currently trading down at 81.13.
Read at Zerohedge this morning.
“Listening to Rehn, Van Rompuy, Juncker and their cohorts is rather like listening to the cheerleaders at the football game and their advice on financial matters is probably right in-line with the knowledge of the cheerleaders; but then I don’t want to insult the cheerleaders.
The economy in Europe is so bad now that a picture is only worth two hundred words. The Europeans blame everything on the ratings agencies lately. There is some wisdom to this. “Moody” is how they are feeling and “Standard & Poor” is what they will be feeling soon.”
** RRR = Risk Reward Ratio
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Written by Gary