December 31st, 2012
in Gary's blogging
Opening Market Commentary For 12-31-2012
Last day of the trading year should be interesting as 99% of traders will be leaving around noon (or have already left) for the New Years Eve festivities tonight.
The SP500 future was down 20 points earlier and settling in down around 12. However, my propitiatory models indicated we would be down just a few points at the opening and perhaps even climb up to the Friday's closing numbers.
The SP500 opened down 4 points and almost recovered to Friday's closing by the 15 minute mark. If there was going to be a big sell-off as many pundits suggested over the weekend it would have happened at the opening and didn't. Generally, the small cap turned to the green side as the BTFD dippers jumped in with abandon cautiously pushing most averages skyward, well upward a bit. The large caps lagged behind as profit taking once again reared its ugly head and turned the volume red. It seems that some waited until today to make their decision to abandoning the sinking ship.
If you haven't read my thoughts on this 'Fiscal Cliff' drama please do at: Icecream and Fiscal Bypass Surgery
By 10 am the averages were still melting upward, albeit slowly. By 10:15 an upward trend has been established, but numbers remain in the flat zone. Definably not a day to take a position.
The algo HFT computers should have a ball jerking the numbers around this afternoon because of low volume.
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.
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 today ends and 2013 begins, but a lot of guessing 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 2012.
I also have continuing 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. Until the 'fiscal cliff' issue is resolved, we will not have much direction indicators showing us the way.
The DOW at 10:15 is at 12945 up 7 or 0.05%.
The SP500 is at 1406 up 3 or 0.27%.
SPY is at 140.40 up 0.34 or 0.24%.
The $RUT is at 835.27 up 3 or 0.38%.
NASDAQ is at 2977 up 16 or 0.56%.
The longer trend is up, the past months trend is bullish to neutral and the current bias is up.
WTI oil was down this morning and is currently trading up at 90.65 trading between 90.00 and 90.95 and the bias is positive.
Brent crude was down earlier and is currently trading up at 109.82 trading between 109.30 and 110.70 and the bias is positive.
Gold was up this morning then turned down radically and now is trending up again. Currently trading sideways at 1662.95, trading range is between 1659.49 and 1669.00 with a neutral bias.
Dr. Copper is at 3.62 up from 3.59 earlier.
The US dollar fell from 79.94 earlier to 79.71 and is currently trading up at 79.79.
From time to time we receive various emails that take positions for and against political factions or perceived civil right injustices. Here is another article that will get wide distribution and I am sure you will find enlightening and scary at the same time.
From reading the list of potential “suspected terrorist” presented in the article I see that I may be on at least one list of 'suspected terrorists' most likely a half dozen. I bet you are too as the list involving an American citizen living on U.S. soil is alarming but mostly disturbing.
I was going to write about it in a forthcoming Friday article, but that would surely have the black helicopters circling my compound that I call home.
The FBI – Drowning In Counter-Terrorism Money, Power and Other Resources – Will Apply The Term “Terrorism” To Any Group It Dislikes And Wants To Control And Suppress.
(thus ushering in all of the powers institutionalized against “terrorists”). Those who supported (or acquiesced to) this expansion of unaccountable government power because they assumed it would only be used against Those Muslims not only embraced a morally warped premise (I care about injustices only if they directly affect me), but also a factually false one, since abuses of power always – always – expand beyond their original application.
Painting by Anthony Freda: www.AnthonyFreda.com.
** RRR = Risk Reward Ratio
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Written by Gary