November 16th, 2012
in Gary's blogging
Midday Market Commentary For 11-16-2012
The averages tried unsuccessfully 5 times to break through their support this morning that is currently keeping the markets from descending any further. Then at 11:10 many of the averages began to melt down below the support that was their mainstay of going further down. By 11:45 the bulls suddenly jumped in to move the markets back up above that line in the sand because the political heads said the lunch with Obama was a good one.
By 12:15 the markets were just above their starting point this morning and the bears once again started to peck away at the gains.
The participation required to move the markets one way or another is simply not there. The bulls and bears are going to wait until next week to resume their attack. However, having said that, I am still not convinced we have seen the end of a bull run. A Santa Clause rally is still a distinct possibility with some investors trying to decide what is going to be best for their portfolio and looming increases in Capital Gains taxes.
This rise in the markets won't last long as the die has been set.
Stocks turned higher after Congressional leaders reported progress in talks with President Barack Obama about cutting the U.S. government's budget deficit.
The Dow Jones industrial average was down as much as 71 points in late morning trading but turned higher after House Speaker John Boehner and other Congressional leaders said they had constructive talks with Obama's team.
Investors have worried that Obama and Congress won't reach a deal in time on the budget to avoid deep cuts in government spending and tax increases that are set to kick in at the beginning of next year.
1000 Points Down On Dow Since QE 3 - Should We Be Worried? by Joseph Stuber
We have given up 1000 points on the Dow in the last six weeks - a milestone of sorts in my opinion. The-1000 point drop doesn't surprise me at all. I have been warning investors for two months now that this was coming. What does surprise me is the relative lack of fear.
I don't have an answer regarding the catalyst that finally tips the scale and induces a market collapse. I just know that day is coming and soon.
The problems are much bigger than the marketplace wants to consider. We are at a tipping point and all the optimism in the world will not alter the downward trajectory of the market at this point.
The inconvenient truth is there is no solution that avoids recession.
Since Bernanke announced QE3 we have been moving toward a market collapse. The truth is there are no buyers out there. Many investors are willing to hold but few are willing to buy. Markets move higher on buying pressure - that is, buyers want to buy more than sellers want to sell. Since no one is willing to step in and buy this market continues to drift lower.
The RRR** was narrow at the opening bell and remained tight into the midday session - just as it has been for the past month. It is getting wider, but some guessing still remains and of course that is the tricky part of the equation. 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 12:15 is at 12581 up 37.65 or 0.31%.
The 500 is at 1358 up 5.37 or 0.40%.
The $RUT is at 771.56 up 2.08 or 0.27%.
SPY is at 136.24 up 0.55 or 0.40%.
The longer trend is up, the past months trend is bearish and the current bias is neutral.
WTI oil is up today and is at 86.55 trading between 85.01 and 86.94 and the bias is positive.
Brent crude last reported at 110.98.
Gold is down this morning. Currently trading up at 1714.44, trading range is between 1717.17 and 1705.00 with a positive bias.
Dr. Copper is at 3.45 down from 3.47 earlier.
The US dollar rose from 81.07 earlier to 81.51 and is currently trading down at 81.41.
** RRR = Risk Reward Ratio
To contact me with questions, comments or constructive criticism is always encouraged and appreciated:
Written by Gary