December 20th, 2012
in Gary's blogging
Midday Market Commentary For 12-20-2012
Midday action was where we left it this morning. The averages are hovering around the unchanged line and can be best described as flat, lackluster and directionless.
I wouldn't expect much in today's trading session – tomorrow is another matter completely.
Interesting article below, but I have difficulty seeing a bullish 2013. The issues I have with charts is that the QE's have skewed the number a great deal. I have found that many are off 40% because of this house of cards the Fed's have built. Take the charts for what they are; a accumulation of past history.
In past commentaries, I've discussed potentially bearish macro-chart divergences that are in place for some global risk-asset markets. However, in this article, I'd like to present a recent development that has potentially bullish implications for U.S. stocks in the nearer term. Specifically, during the last week, the S&P 500 Index may have formed the right shoulder of an inverted head-and-shoulders pattern. Take a look at the chart below. More...
The RRR** has been narrow at the opening bell for the past several months and continued the trend again this morning. This continuing trend makes predictions of session movements nearly impossible making trading futile and unprofitable. This morning it was as narrow as I have seen it in 6 months.
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 13247 down 5 or -0.04%.
The SP500 is at 1437 up 1.17 or 0.08%.
SPY is at 144.48 up 0.17 or 0.11%.
The $RUT is at850.06 up 2.19 or 0.26%.
NASDAQ is at 3042 down 2 or -0.07%.
The longer trend is up, the past months trend is bullish and the current bias is neutral.
WTI oil was down today and is currently trading up at 89.76 trading between 90.20 and 89.28 and the bias is neutral.
Gold was down this morning. Currently trading down at 1640.05, trading range is between 1671.56 and 1635.70 with a negative bias.
Dr. Copper is at 3.53 down from 3.61 earlier.
The US dollar fell from 79.43 earlier to 79.06 and is currently trading down at 79.36.
** RRR = Risk Reward Ratio
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Written by Gary