January 11th, 2013
in Gary's blogging
Opening Market Commentary For 01-11-2013
The premarket DOW future was down a couple of points and the others were flat and mixed. The DOW and NASDAQ have been lagging while the Russell 2000 is at an all time high and the SP500 is near a multi-year high. Fireworks is probably in the picture for next week as the earnings season begins in earnest.
Markets opened mixed, mostly down on low red volume. Investors at this point are mostly on the sidelines unsure of the uncertainties of the Eurozone, US financial disposition and negative market technical indicators.
I see additional room for the DOW to move up, but from 'there' it is generally expected to see the averages decline 5% or more. Morning indicators are mixed with low volume; a great combination for the HFT computers to melt the averages up later in the day.
If you are a bear this next article should be of interest.
Because there are still some traders who adhere to such old normal traditions as charting and technical analysis (because apparently the FOMC committee sits down each month and observes Ichimoku clouds, RSI indicators and Bollinger bands), it is probably notable that one of the most respected chartists, Steve Cohen's favorite technician Tom DeMark, is now uniformly bearish on virtually all markets around the world which have triggered a sell signal in his studies, and is about to drop the axe on the US as well where a "Daily 13" signal is imminent. The caveat, of course, is that in a world in which fundamentals haven't mattered in years, which should technicals?
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 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 several years.
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. I keep hoping for increasing volumes 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 10:15 is at 13446 down 24 or -0.18%.
The SP500 is at 1468 down 4 or -0.27%.
SPY is at 146.66 down 0.42 or -0.28%.
The $RUT is at 878.43 down 2.80 or -0.32%.
NASDAQ is at 3116 down 5 or -0.17%.
The longer trend is up, the past months trend is bullish and the current bias is down.
WTI oil was down this morning and is currently trading up at 93.22 trading between 94.60 and 92.64 and the bias is negative.
Brent crude was down earlier and is currently trading sideways at 110.33 trading between 113.28 and 110.05 and the bias is negative.
Gold was down this morning. Currently trading down at 1658.10, trading range is between 1676.12 and 1656.10 with a negative bias.
Dr. Copper is at 3.66 falling from 3.71 earlier.
The US dollar fell from 80.53 earlier to 79.50 and is currently trading up at 79.70.
** RRR = Risk Reward Ratio
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Written by Gary