January 24th, 2013
in Gary's blogging
Closing Market Commentary For 01-24-2013
Think of today's SP500 swing as the canary in the coal mine. It is the largest intraday swing in 2013 and may signal the bearishness in the air like the arctic breeze just before winter blows in.
The 500 closed within pennies of yesterday and on somewhat good news doesn't explain the 'big' rally many pundits are claiming going on right now. The NASDAQ was negative all day and unless it makes a turn around then the markets are in for at least a small correction. But you and I know it is going to be more than that.
Interesting viewpoint, of which I agree. If you didn't read this at the midday post here it is again.
The stock market is continuing to rally and test the two major resistance levels of 2000 and 2007 (1555 and 1575 on the S&P 500). We do not believe the market will be able to break through those levels in any significant way since they were established after two major financial bubbles (dot-com and housing) and peaked after multi-year gains followed by collapses in the market.
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 13825 up 46 or 0.33%.
The SP500 is at 1494 up 0.17 or 0.12%.
SPY is at 149.54 up 0.46 or 0.31%.
The $RUT is at 900.19 up 3.49 or 0.39%.
NASDAQ is at 3130 down 23.29 or -0.74%. (Watch out as this is telling!)
The longer trend is up, the past months trend is bullish and the current bias is down.
WTI oil rose this morning and is currently trading up at 96.06 trading between 95.15 and 96.70 and the bias is neutral.
Gold was down this morning. Currently trading sideways at 1668.46, trading range is between 1686.23 and 1665.45 with a neutral bias.
Dr. Copper is at 3.68 down from 3.71 earlier.
The US dollar fell from 80.21 earlier to 79.92 and is currently trading sideways at 80.03.
The 500 after the close.
The DOW after the close.
** RRR = Risk Reward Ratio
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Written by Gary