December 17th, 2012
in Gary's blogging
Midday Market Commentary For 12-17-2012
Noontime averages were still melting upwards as both buyers and sellers battle it out. The HFT computers appear to be the number one factor that is pushing the numbers higher. Still the averages remain in the middle of the zone of resistance and support, neither of which has been violated.
Volume is moderately low with the buyers outnumbering the sellers and we will have to wait out this session before making any commitments.
The markets went up this morning in light of poor US financial news. Hopium is being sold to the markets again.
The New York Federal Reserve's regional manufacturing gauge fell to -8.10 in December from -5.22 in November. The index was expected to rise to -1. Readings above zero point to expansion while those below indicate contraction.
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. 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 12:15 is at 13221 up 86 or 0.66%.
The SP500 is at 1426 up 13 or 0.91%.
SPY is at 143.37 up 1.25 or 0.88%.
The $RUT is at 831.51 up 7.73 or 0.94%.
NASDAQ is at 2999 up 28 or 0.94%.
The longer trend is up, the past months trend is bullish and the current bias is up.
WTI oil was up today and is currently trading down at 87.46 trading between 86.48 and 87.65 and the bias is neutral.
Brent crude last report was at 109.15.
Gold has been mixed this morning. Currently trading up at 1696.68, trading range is between 1686.00 and 1699.90 with a positive bias.
Dr. Copper is at 3.67 down from 3.69 earlier.
The US dollar fell from 79.78 earlier to 79.53 and is currently trading up at 79.56.
** RRR = Risk Reward Ratio
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Written by Gary