December 12th, 2012
in Gary's blogging
Midday Market Commentary For 12-12-2012
Averages drift sideways awaiting the FOMC meeting. Word on the street is that some are expecting a QE4 to replace the expiring Twist. Also expected is dashing hopes in a continued bull run after being rebuffed yesterday at the resistance.
The last gap on $RUT was closed this morning at 837 and has since melted back down to yesterday's closing. The low caps need to plow ahead if this bull run is going to succeed in seeing new highs, but there is serious doubt of this happening. Currently the averages are flat and mixed.
I said yesterday that when the $RUT reached 837 that would conclude the Santa Claus rally if it turned back, which it did. To confirm the end the averages must close below their respected resistance levels which most are just below now.
The RRR** has been narrow at the opening bell for the past several months and continued the trend again 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. 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 12:00 is at 13255 up 7 or 0.05%.
The SP500 is at 1430 up 2 or 0.15%.
SPY is at 143.66 up 0.22 or 0.15%.
The $RUT is at 834.49 down 0.50 or -0.06%.
NASDAQ is at 3020 down 2.65 or -0.08%.
The longer trend is up, the past months trend is bullish and the current bias is down.
WTI oil was up today and is currently trading up at 86.84 trading between 85.75 and 87.17 and the bias is positive.
Brent crude was up today and is currently trading up at 109.76 trading between 108.15 and 110.20 and the bias is positive.
Gold was up this morning. Currently trading up at 1713.42, trading range is between 1707.45 and 1718.80 with a negative bias.
Dr. Copper is at 3.70 down from 3.71 earlier.
The US dollar fell from 80.24 earlier to 79.98 and is currently trading up at 80.07.
** RRR = Risk Reward Ratio
To contact me with questions, comments or constructive criticism is always encouraged and appreciated:
Written by Gary