January 15th, 2013
in Gary's blogging
Opening Market Commentary For 01-15-2013
Premarket was down and the SP500 was down 5 points but not outside the narrow sideways trough that was formed 8 sessions ago. In fact not even close indicating today was going to be the same 'ol, same 'ol.
Markets did open lower and gradually melted back up half way recovering some of the opening lows. Volume is relatively light suggesting the HFT computers may melt the markets up somewhat today. But I wouldn't count on anything just yet. The morning financial reporting was not very good and should have kept the averages in check.
I mentioned yesterday in my closing remarks that if you bought long you might be pleasantly surprised this morning. Well, that was tongue and cheek as I can't see this market going too much higher. There is room for it to do so, but once at the predefined 'tops', it is down hill from there as I see a massive correction.
January Empire State Survey: Manufacturing -7.8 vs. 0.0 expected, -8.10 prior. New Orders down 4 points M/M to -7.2, while the shipments index fell 15 points to -3.1. Prices paid up to 22.6. The level of optimism rose slightly from last month, but is at a historically low level.
The first column is what was reported. The second column is what was expected and the third is thew previous reporting.
December Retail Sales: +0.5% vs. +0.2% expected, 0.4% prior. Ex-auto +0.3% vs -0.1% expected.
Dec. Producer Price Index: -0.2% vs. -0.1% expected and -0.8% prior. Core PPI +0.1% vs. +0.2% expected and +0.1% prior.
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. 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 10:15 is at 13483 down 24 or -0.18%.
The SP500 is at 1466 down 4 or -0.26%.
SPY is at 146.54 down 0.48 or -0.33%.
The $RUT is at 878.33 down 1.80 or -0.20%.
NASDAQ is at 3097 down 20 or -0.65%.
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 down at 93.97 trading between 94.45 and 92.95 and the bias is neutral.
Brent crude was up earlier and is currently trading down at 111.44 trading between 112.45 and 110.35 and the bias is negative.
Gold was up this morning. Currently trading up at 1681.51, trading range is between 1659.50 and 1684.48 with a positive bias.
Dr. Copper is at 3.63 falling from 3.69 earlier.
The US dollar rose from 79.43 earlier to 79.74 and is currently trading down at 79.61.
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
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Written by Gary