December 18th, 2012
in Gary's blogging
Midday Market Commentary For 12-18-2012
Markets closed in the green and low volume for most of the afternoon sessions. Towards the end of today's session there was elevated green volume with mainly the 'Dippers' believing the fiscal cliff crisis is well on its way to being solved.
On that note I am not so sure just where the 'negotiations' are and would remind all to keep an open mind. There are still signs that we could witness a 'severe' pull back as most of my readers know only too well that there kinks in the US financial armor. Follow up:
It is for that reason alone that I continue to sit on my hands for the time being. Way too much investor interest in being put into the unknown of 'solving' the fiscal cliff plus a plethora of mixed signals.
The resistance zones for the various markets today are interesting and very difficult to understand. The SP500, SPY and the $RUT closed slightly above the high end of its zone - bullish. The DOW and The NASDAQ on the other hand are only half way there – bearish and also a dichotomy of opposing values.
SPY broke upwards out of its Bollinger band and I expect it to slide sideways – something to watch tomorrow. Boy, this would be the perfect gift to the greedy -that is when the bottom falls out.
The RRR** was surprisingly narrower than usual at the opening bell this morning. By noon it had widened to a 'normal' width which is just too thin to trade. By the closing it became tradeable, but be careful of a bear trap. The continuing narrow width trend that we have been seeing for the past several months 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 4 pm is at 13350 up 115 or 0.87%.
The SP500 is at 1446 up 16.43 or 1.15%.
SPY is at 145.30 up 1.53 or 1.06%.
The $RUT is at 847.69 up 12.69 or 1.52%.
NASDAQ is at 3054 up 43.93 or 1.46%.
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 up at 87.99 trading between 87.91 and 88.14 and the bias is neutral.
Brent crude last report was 109.15.
Gold was down this morning. Currently trading down at 1671.88, trading range is between 1702.50 and 1664.28 with a negative bias.
Dr. Copper is at 3.65 down from 3.68 earlier.
The US dollar fell from 79.64 earlier to 79.78 and is currently trading even at 79.53.
The 500 at the close.
The DOW at the close.
The $COMP at the close.
** RRR = Risk Reward Ratio
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Written by Gary