January 18th, 2013
in Gary's blogging
Closing Market Commentary For 01-18-2013
My proprietary indicators continue to show a negative market balance. Starts out positive in the morning and by the afternoon it turns negative as the SP500 rises higher. This action ALWAYS happens just before the market reverses itself. The bottom line here is to watch your butts.
Markets closed again with a new high being made and closing higher than yesterday. The rubber band is getting tighter an tighter – something has to give.
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 13649 up 53 or 0.39%.
The SP500 is at 1486 up 5 or 0.34%.
SPY is at 148.31 up 0.30 or 0.20%.
The $RUT is at 892.80 up 2.44 or 0.27%.
NASDAQ is at 3134 down 1.29 or -0.04%.
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 sideways at 95.39 trading between 95.10 and 95.70 and the bias is positive.
Gold was up this morning. Currently trading up at 1684.75, trading range is between 1665.00 and 1694.90 with a negative bias.
Dr. Copper is at 3.68 up from 3.60 earlier.
The US dollar up from 79.70 earlier to 80.27 and is currently trading up at 80.13.
The SP500 at the close.
The DOW at the close.
** RRR = Risk Reward Ratio
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Written by Gary