December 20th, 2012
in Gary's blogging
Closing Market Commentary For 12-20-2012
Late today getting this blog out so I'll be brief. Market closed up after melting up towards the afternoon. Looks like the algo computer are up to their old tricks because the volume has declined along with the rise.
Interesting article and good advise.
The "January Effect" has become a catch-phrase for the overall generally good performance of stocks in the month of January. It is not a perfect seasonal indicator, and in many years throughout history the January effect has not resulted in early year stock price appreciation. Therefore, buying blindly is unlikely to bring fantastic returns, but buying stocks that are already strongly trending may give them even more of a boost should the January effect take hold in 2013. Read 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 4 pm is at 13311 up 60 or 0.45%.
The SP500 is at 1443 up 7.88 or 0.55%.
SPY is at 145.18 up 0.89 or 0.62%.
The $RUT is at 852.49 up 4.60 or 0.54%.
NASDAQ is at 3050 up 6 or 0.20%.
The longer trend is up, the past months trend is bullish and the current bias is up.
WTI oil was down today and is currently trading down at 89.94 trading between 90.50 and 89.28 and the bias is negative.
Gold was down this morning. Currently trading down at 1647.08, trading range is between 1671.56 and 1635.70 with a positive bias.
Dr. Copper is at 3.54 down from 3.61 earlier.
The US dollar fell from 79.43 earlier to 79.06 and is currently trading down at 79.31.
The 500 at the close.
The DOW at the close.
** RRR = Risk Reward Ratio
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Written by Gary