January 17th, 2013
in Gary's blogging
Midday Market Commentary For 01-17-2013
Markets have been sliding sideways for most of the morning trying twice to best the earlier morning high but to no avail. The volume has fallen off to a point where the HFT computers may be able to melt the averages somewhat higher.
By noon market activity resumed its normal everyday lackluster cadence. I think it is likely the markets will fall off somewhat before the close.
The news is not exactly inspiring for long term investments and I remain on the sidelines for the time being.
The Philadelphia Federal Reserve's gauge of manufacturing activity in the mid-Atlantic region fell to -5.8 in January from 4.6 in December. The index was expected to rise to 5.8. Readings above zero point to expansion while those below indicate contraction.
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 12:15 is at 13583 up 72 or 0.54%.
The SP500 is at 1479 up 7 or 0.49%.
SPY is at 147.89 up 0.84 or 0.57%.
The $RUT is at 889.00 up 6.69 or 0.76%.
NASDAQ is at 3134 up 17 or 0.54%.
The longer trend is up, the past months trend is bullish and the current bias is neutral.
WTI oil was up this morning and is currently trading up at 95.44 trading between 93.12 and 95.70 and the bias is positive.
Gold gaped down this morning and that was covered. Currently trading up at 1688.17, trading range is between 1690.01 and 1666.64 with a positive bias.
Dr. Copper is at 3.66 up from 3.60 earlier.
The US dollar fell from 79.95 earlier to 79.62 and is currently trading up at 79.81.
In Doug Short's article, S&P 500 Snapshot: New Interim High - Signs of Exhaustion? In this daily chart of SPY, the S&P 500's ETF kissing cousin, note the callout of the last five sessions, and check the vanishing volume. Symptoms of exhaustion? I am certain we are going to see a decline or correction before any further advance beyond the resistance lines drawn in the market's sand. Just how much may depend on the many financial issues going on right now.
** RRR = Risk Reward Ratio
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Written by Gary