Markets In Tight, Narrow Untradable Range

January 8th, 2013
in Gary's blogging

Midday Market Commentary For 01-08-2013

Markets continued to melt down until the HFT computers brought some of the averages back up a bit. By 1 pm the averages were once again melting down on anemic red volume.

Markets remain caught in a tight, narrow and untradable range.

Follow up:

The RRR** has been narrow at the opening bell for the past several months and continued the trend again this morning being worse than usual and continued that way 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 1:00 is at 13294 down 87 or -0.65%.

The SP500 is at 1453 down 9 or -0.60%.

SPY is at 145.16 down 0.81 or -0.55%.

The $RUT is at 871.83 down 4 or -0.46%.

NASDAQ is at 3079 down 20 or -0.65%.

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 up this morning and is currently trading down at 92.96 trading between 92.70 and 93.79 and the bias is negative.

Brent crude was up earlier and is currently trading sideways at 111.88 trading between 111.15 and 112.45 and the bias is neutral.

Gold was up this morning. Currently trading up at 1658.28, trading range is between 1658.95 and 1642.60 with a positive bias.

Dr. Copper is at 3.67 down from 3.68 earlier.

The US dollar rose from 80.22 earlier to 80.58 and is currently trading up at 80.52.

** 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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