November 15th, 2012
in Gary's blogging
Midday Market Commentary For 11-15-2012
The morning session was extremely choppy and mixed, but within a tight narrow range dashing any thoughts of trading in a safe environment. While the averages were bouncing back and forth across the opening numbers, they finally started to melt to new lows.
By noon the averages were decidedly in the red and the outlook looking bearish as they approached another minor support.
I doubt that the blame game is going to stop any time soon as that is Obama's favorite mantra.
Let's see if Bush Sandy can be blamed for not only the Empire Fed, whose employment and expectations components plunged . . .
the Initial Claims, which soared and missed expectations by the second most in the past 13 years . . .
but also for the Philly Fed, which just plunged from 5.7 to -10.7, far below consensus of 2.0, the 6th miss of the last 8 (except for last month of course). . .
and [then] returning to solidly negative territory after last month's "miraculous" pre-election surge.
And while virtually all subcomponents plunged, the one that stood out to the upside was Prices Paid, as the margin collapse is set to ravage all companies not only in the greater Philadelphia region but everywhere else soon as reality, deferred for the duration of the Obama reelection campaign, slams everyone in the stomach.
The RRR** was inviting at the opening bell, but not wide enough, even at the midday mark 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 12:00 is at 12514 down 56 or -0.44%.
The 500 is at 1349 down 5.83 or -0.43%.
The $RUT is at 767.89 down 5.31 or -0.61%.
SPY is at 135.34 down 0.59 or -0.43%.
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 85.89 trading between 86.09 and 85.78 and the bias is negative.
Brent crude was up today and is currently trading down at 110.72 trading between 109.60 and 111.12 and the bias is negative.
Gold was down this morning with a brief stint to the upside and then turned back down - significantly. Currently trading down at 1713.96, 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 80.96 earlier to 81.24 and is currently trading up at 81.09.
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