December 7th, 2012
in Gary's blogging
Closing Market Commentary For 12-07-2012
As expected the averages melted up slightly manly because of the HFT computers. The only bright spot is that volume also eased up indicating more investors believe that the Santa Claus Rally is still in the works.
Overall the Large caps carried the day while the small caps barely made into the green and the NASDAQ ended up in the red which isn't exactly bullish, but we will see what next week brings.
The RRR** has been narrow at the opening bell for the past several months and surprisingly continued the trend again this morning in light of the pre-market action and into the closing session. The width of most long ETF' looked exactly like the past lackluster sessions, narrow and unsuitable for profitable trading as we head into the afternoon session. This trend of narrow RRR** makes predictions of movements during the session nearly impossible and as you know, trading becomes futile and unproductive.
As long as market volume remains light or the trading range is narrow, one can expect successful trading to remain elusive. The RRR** has been wider on volatile sessions lately and is expected to become more so as the year ends, but a lot of guessing still remains. Correctly 'guessing', of course, is the tricky part of the successful trading equation. Any trades today will probably end up on the meager side of profitability if you are lucky as most trades have been less than optimal during this past year.
I also have issues with some pundits writing almost every day that there are setups for day trading. This may be 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. Do not fall into the trap of money burning a hole in your pocket, sit tight better days are coming. Watch for increasing volume to signal improved trading.
Swing trading is also at your own risk for all the reasons mentioned above. Because the market is at a crossroads of sorts, I would prefer to sit on my hands as the markets are currently untradable. Guessing where the market is going to be tomorrow or next week, at this time anyway, can be a foolish and costly endeavor.
The DOW at 4:00 is at 13155 up 81 0.62%.
The 500 is at 1418 up 4.13 or 0.29%.
SPY is at 142.37 up 0.36 or 0.25%.
The $RUT is at 822.27 up 0.48 or 0.06%.
NASDAQ is at 2978 down 11.23 or -0.38%.
The longer trend is up, the past months trend is bearish and the current bias is neutral.
WTI oil was down then up and again down today and is currently trading up at 85.99 trading between 86.90 and 85.77 and the bias is negative.
Brent crude was up today and is currently trading up at 107.22 trading between 106.66 and 107.88 and the bias is negative.
Gold gaped down this morning and recovered. Currently trading up at 1703.90, trading range is between 1683.16 and 1704.00 with a positive bias.
Dr. Copper is at 3.67 up from 3.65 earlier.
The US dollar rose from 80.21 earlier to 80.68 and is currently trading up at 80.41.
The SP500 at the close. The reluctant 500 is staying just below the 50DMA as it travels sideways just as the Russell remains just above the same line in the sand. There is much unrest and indecision among investors as they consider the European, Chinese and United States financial doldrums.
The DOW at the close. The DOW might move up to the 13254 resistance in the next several weeks before beginning a decent that I expect will deepen in 2013 as a trend.
** RRR = Risk Reward Ratio
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Written by Gary