Markets Still Melting Down On Low Volume

January 7th, 2013
in Gary's blogging

Midday Market Commentary For 01-07-2013

The averages have been muddling along for most of the morning, mostly down, indicating Mr. Market is taking a rest of sorts. Today is not the day to buy some inverse ETF's as there is more upside to come, but not much if you are in the bear camp. I expect more market volatility as the earnings start to come out as investors feel the pulse of Mr. Market.

By noon the markets were settled in waiting for the weekly financial,s that will probably set the tone for the weeks averages. I would expect today's session to end lower and tomorrow's session to be one that is more positive.

Follow up:

Do not count on today or tomorrow to be the trend setter. By the end of the week we should have a better idea if the 'January Effect' will amount to anything.

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 2012 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 the past year.

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 although guessing overnight trades would have been most profitable. Again, 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 13359 down 76 or -0.56%.

The SP500 is at 1457 down 9 or -0.59%.

SPY is at 145.60 down 0.80 or -0.55%.

The $RUT is at 874.38 down 5 or -0.54%.

NASDAQ is at 3091 down 11 or -0.34%.

The longer trend is up, the past months trend is bullish and the current bias is down.

How Oil Really Gets Priced

WTI oil was down this morning and is currently trading down at 92.99 trading between 93.24 and 92.40 and the bias is negative.

Brent crude was down earlier and is currently trading down at 111.03 trading between 111.52 and 110.54 and the bias is negative.

Gold was down this morning. Currently trading down at 1645.34, trading range is between 1662.55 and 1644.00 with a negative bias.

Dr. Copper is at 3.68 down from 3.71 earlier.

The US dollar down from 80.80 earlier to 80.38 and is currently trading down at 80.40.

** RRR = Risk Reward Ratio

To contact me with questions, comments or constructive criticism is always encouraged and appreciated:

Written by Gary

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