January 28th, 2013
in Gary's blogging
Opening Market Commentary For 01-28-2013
US: Durable Goods Orders tops forecasts and the premarket was up accordingly. I really thought the markets were going break through the resistance barriers and make a grab for the gold ring. So I was surprised to see several of my proprietary indicators signaling red flags so early in the session. Of course we all know this is a crazy market, but just the same I am looking for some sort of reality here.
Markets opened down but has remained in the uptrend channel of the last 5 days. So it was difficult to determine market direction early in the session with volume being on the light side. By 10 am investor participation was still on the light side, $RUT had closed its opening gap up and red volume was picking up.
By 10:15 the up trend was in jeopardy of being broken downward, but we are going to have to wait for a while longer to ascertain any trend today.
The RRR** has been narrow at the opening bell for the past several months and continued the trend again this morning. 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 10:15 is at 13873 down 22 or -0.16%.
The SP500 is at 1497 down 5 or -0.35%.
SPY is at 149.64 down 0.59 or -0.40%.
The $RUT is at 901.17 down 4 or -0.45%.
NASDAQ is at 3148 down 0.69 or -0.02%.
The longer trend is up, the past months trend is bullish and the current bias is down.
WTI oil was up and then turned down this morning and is currently trading down at 95.60 trading between 96.80 and 95.75 and the bias is negative.
Gold was trading down and has turned up this morning. Currently trading up at 1657.45, trading range is between 1662.15 and 1652.35 with a positive bias.
Dr. Copper is at 3.65 down from 3.67 earlier.
The US dollar fell from 79.99 earlier to 79.79 and is currently trading up at 79.94.
** RRR = Risk Reward Ratio
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Written by Gary