January 8th, 2013
in Gary's blogging
Closing Market Commentary For 01-08-2013
Markets recovered half of their losses from the mornings lows, but remained in the red all day. Volume was low for most of the session and picked up in the green by the closing bell.
Alcoa (AA) reported 4th quarter earnings at $0.06 in line with $0.06 expected. Revenue was $5.9 billion on 5.6 billion expected. So the earnings season starts off well. AA jumped from 5.10 to 9.34 in after hours trading and quickly settled down at 9.20.
Apparently the 'Dippers' liked the US Consumer report as the markets melted up – slightly.
Fed's Lacker says too much stimulus raises risk of inflation.
U.S. CONSUMER CREDIT(NOV) ROSE TO $16.045B VS $12.750B AND REVISED TO $14.076B FROM $14.158B.
Fed's Lacker says U.S. economy will probably growth at 2% this year.
Fed's Lacker says recession 'made many consumers more cautious'.
The RRR** has been narrow at the opening bell for the past several months and continued the trend again this morning being worse (narrow) than usual and continued that way into the closing 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 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 4:00 is at 13328 down 55 or -0.41%.
The SP500 is at 1457 down 4.74 or -0.32%.
SPY is at 145.59 down 0.37 or -0.25%.
The $RUT is at 874.70 down 1.10 or -0.13%.
NASDAQ is at 3091 down 7 or -0.23%.
The longer trend is up, the past months trend is bullish and the current bias is up.
WTI oil was up this morning and is currently trading up at 93.28 trading between 92.40 and 93.79 and the bias is positive.
Brent crude was up earlier and is currently trading up at 112.16 trading between 110.50 and 112.45 and the bias is positive.
Gold was up this morning. Currently trading down at 1658.71, trading range is between 1658.95 and 1642.60 with a positive bias.
Dr. Copper is at 3.68 up from 3.67 earlier.
The US dollar rose from 80.22 earlier to 80.58 and is currently trading down at 80.43.
The 500 at the close.
The DOW at the close.
** RRR = Risk Reward Ratio
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Written by Gary