December 11th, 2012
in Gary's blogging
Midday Market Commentary For 12-11-2012
Around 11:30 the bull run began to run out of steam as it peaked and the started to melt back down, perhaps leveling off for the day. Off and on we are seeing spurts of selling which I suspect will pick up during the week as many investors will decide to take their profits and run avoiding next years increase in capital gains tax.
By 12:30 volume had fallen slightly and the MACD started to reverse. The markets today will most likely become choppy and unpredictable as the bulls and the bears start the annual year end battle.
The RRR** has been narrow at the opening bell for the past several months and continued the trend into the midday session. This continuing trend makes predictions of session movements nearly impossible making trading futile and unprofitable.
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. The gap up this morning would have been considered tradeable, but you would have had to 'guess' at yesterday's closing that today would be up and hold overnight. 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 12:30 is at 13289 up 118 or 0.90%.
The SP500 is at 1432 up 14 or 0.98%.
SPY is at 143.89 up 1.41 or 0.99%.
The $RUT is at 834.35 up 8.03 or 0.97%.
NASDAQ is at 3029 up 42 or 1.41%.
The longer trend is up, the past months trend is bearish to neutral and the current bias is up.
WTI oil was up earlier but turned sour and is currently trading up at 85.78 trading between 85.30 and 86.38 and the bias is negative.
Brent crude was up today then turned down. Currently trading up at 107.82 trading between 107.10 and 108.31 and the bias is negative.
Gold was up this morning and then turned south in a big way. Currently trading up at 1708.22, trading range is between 1704.78 and 1714.40 with a negative bias.
Dr. Copper is at 3.69 down from 3.72 earlier.
The US dollar fell from 80.50 earlier to 80.19 and is currently trading up at 80.22.
** RRR = Risk Reward Ratio
To contact me with questions, comments or constructive criticism is always encouraged and appreciated:
Written by Gary