Averages Melt Up Under Very low Volume

January 15th, 2013
in Gary's blogging

Midday Market Commentary For 01-15-2013

Markets continued to melt up during the morning session on very low volume suggesting the HFT computers are at work.

There is not a lot to suggest that the markets are poised to swing either way in today's session and caution is suggested for anyone that is willing to guess their way to riches. Today appears to be another wind-up session that will explode later in the week.

Follow up:

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 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. Best Stock Market Indicator Ever: Unchanged at 79% and Secondaries Confirm "Tradable" 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 noon is at 13494 down 12 or -0.09%.

The SP500 is at 1468 down 2 or -0.16%.

SPY is at 146.67 down 0.30 or -0.20%.

The $RUT is at 882.05 up 2 or 0.22%.

NASDAQ is at 3103 down 14 or -0.45%.

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

How Oil Really Gets Priced

WTI oil was up this morning and is currently trading down at 93.86 trading between 94.45 and 92.95 and the bias is neutral.

Brent crude was up earlier and is currently trading down at 111.08 trading between 112.45 and 110.35 and the bias is negative.

Gold was up this morning. Currently trading up at 1683.34, trading range is between 1659.50 and 1684.48 with a positive bias.

A Developing Trade in Copper Might Confirm Bearish View of Equities

Dr. Copper is at 3.64 falling from 3.69 earlier.

The US dollar rose from 79.43 earlier to 79.74 and is currently trading down at 79.62.

I have said all along that the Keynesian PhD's running the various countries around the world have their bums up you know where.


The formerly hawkish Minneapolis Fed chief Kocherlakota stakes out his position as the most dovish of the FOMC. He says current policy isn't easy enough and calls for the Fed to lower its unemployment rate threshold - the trigger for tighter policy - to 5.5% from 6.5%.

The speech is worth the read - an insight into the thinking of PhDs who believe tweaking a "communications policy" or altering some level of reserves can guide a $16T economy to the exact point they wish it to go.

** 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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