January 21st, 2013
in Gary's blogging
Opening Market Commentary For 01-21-2013
The US markets are closed today for the inauguration of the US President. The rest of the World's financial centers are open but muted, leading credence to the US financial power house effecting world markets.
For the rest of the week starting tomorrow it is probably best to remember the US markets remain overbought and are susceptible to surprise attacks from the bears. We are still dealing with the wrangling of the 'Fiscal Cliff' and the US debt ceiling which could turn the markets on a dime.
I will return tomorrow morning with the opening market commentary.
The price of crude oil slipped closer to $95 a barrel on Monday, with energy investors keeping to the sidelines as U.S. markets were closed for Martin Luther King, Jr. Day. By early afternoon in Europe, benchmark oil for February delivery was down 24 cents to $95.25 a barrel in electronic trading on the New York Mercantile Exchange.
The contract rose 7 cents to finish at $95.56 per barrel on the Nymex on Friday. "Due to the lack of major economic indicators, investors will be looking for some direction to the global equity markets and the U.S. dollar movements," said a report from Sucden Financial Research in London.
A stronger dollar tends to put pressure on oil prices by making crude more expensive for traders using other currencies. On Monday, the euro was down against the dollar, to $1.3314 from $1.3375 on Friday.
The RRR** has been narrow at the opening bell for the past several months and continued the trend has been the legacy of this market place for over a year. This continuing trend makes predictions of session movements nearly impossible making trading futile and mostly 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 the first quarter in 2013 begins, but a lot of guessing remains. Correctly 'guessing', of course, is the tricky part of the successful trading equation. Most trades made in the last month probably ended up on the meager side of profitability. If you have been lucky you made some profit, but 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.
Long positions have been the only game in town but also have the greatest risk of collapsing for little or no reason.
The longer trend is up, the past months trend is bullish and the current bias is down.
WTI oil was slightly down this morning and is currently trading up at 95.17 trading between 95.34 and 95.05 and the bias is neutral to negative.
Gold was up earlier then moved sideways and is currently melting down this morning. Currently trading down at 1686.49, trading range is between 1691.25 and 1687.50 with a neutral to negative bias.
Dr. Copper is at 3.67 falling from 3.68 earlier.
The US dollar fell from 80.14 earlier to 80.00 and is currently trading up at 80.08.
** RRR = Risk Reward Ratio
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Written by Gary