January 8th, 2013
in Gary's blogging
Opening Market Commentary For 01-08-2013
Premarket was down a few points, but not enough to cause more than a yawn. There is a lot of speculation of where the market is heading this week with arguments for a decline and those for a continued rise. We will know soon enough.
The markets opened down, flat and on anemic red volume. Gad, I hope this isn't going to be another dismal, lackluster and boring session. By 10 am the markets had done nothing in regard of choosing a direction and remained flat.
Some averages are oversold to the point I am concerned to where these averages are going to end up. Yes, I see a decline, but just how much with all the old ma and paw cash crowd gone there are few left to panic anymore. I certainly wouldn't want to go long right now. (Thanks to 'S' for the tip.)
The Nikkei’s 14-day Relative Strength Index (RSI) exceeds 80 and we can’t recall ever seeing anything as short-term oversold — in a hard currency market — as the yen/dollar with its RSI of 10. The Russell 2000 is the most overbought of the U.S. equity indices with an RSI of 73. Should set up for an interesting week of consolidating last week’s big gains.
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. 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 10:00 is at 13343 down 40 or -0.30%.
The SP500 is at 1458 down 4 or -0.27%.
SPY is at 145.65 down 0.32 or -0.22%.
The $RUT is at 875.58 down 0.23 or -0.03%.
NASDAQ is at 3096 down 3 or -0.10%.
The longer trend is up, the past months trend is bullish and the current bias is down.
WTI oil was up this morning and is currently trading down at 93.43 trading between 93.04 and 93.79 and the bias is negative.
Brent crude was up earlier and is currently trading down at 112.14 trading between 111.15 and 112.45 and the bias is positive.
Gold was up this morning. Currently trading down at 1655.42, trading range is between 1658.80 and 1642.60 with a positive bias.
Dr. Copper is at 3.68 up from 3.67 earlier.
The US dollar fell from 80.75 earlier to 80.22 and is currently trading down at 80.46.
** RRR = Risk Reward Ratio
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Written by Gary