January 16th, 2013
in Gary's blogging
Closing Market Commentary For 01-16-2013
Markets closed in a similar fashion to yesterday's close. In fact the entire session looked just like yesterday. The SP500 squeezed out a new high by 0.63 but backed off.
SPY experienced a relatively strong sell off at the close under relatively heavy volume. I still thing we are going to have at least one blowout day to mark the top and then a decline. Just wish I knew how much - 5.5% maybe?
The only other news, negative, didn't alter the markets melting up action.
In its somewhat typical fashion, the Beige Book was dominated by the four 'M' words 'mixed', 'moderate', 'measured', and 'modest' as any weakness was blamed on fiscal cliff uncertainty (even though macro data and the market itself seems to have shrugged all of that silliness off rather dismissively).
Employment conditions were little changed, Real Estate prices rose in 11 districts,and energy sector activity was mixed:
*FED: TRENDS IN WAGES, PRICES, EMPLOYMENT 'RELATIVELY UNCHANGED'
*FED REGIONAL BANKS REPORT 'MODEST OR MODERATE' ECONOMIC GROWTH
The RRR** has been narrow at the opening bell for the past several months and continued the trend 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 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 4:00 is at 13510 down 23 or -0.17%.
The SP500 is at 1472 up 0.29 or 0.02%.
SPY is at 146.94 down 0.14 or -0.10%.
The $RUT is at 892.31 down 2.28 or -0.26%.
NASDAQ is at 3117 up 7 or 0.22%.
The longer trend is up, the past months trend is bullish and the current bias is down.
WTI oil was trading in a very narrow 50 cent range this morning and is currently trading down at 94.15 trading between 93.10 and 94.40 and the bias is positive.
Brent crude was generally down in light trading earlier and is currently trading up at 110.61 trading between 110.28 and 110.78 and the bias is neutral.
Gold was down this morning. Currently trading down at 1679.98, trading range is between 1664.00 and 1684.00 with a negative bias.
Dr. Copper is at 3.61 down from 3.68 earlier.
The US dollar rose from 79.66 earlier to 79.94 and is currently trading down at 79.85.
The 500 at the close.
The DOW at the close.
** RRR = Risk Reward Ratio
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Written by Gary