January 29th, 2013
in Gary's blogging
Opening Market Commentary For 01-29-2013
Another day of indecision coming up for investors as morning futures are showing up in the negative column. Still well within the up trend channel Mr. Market can't decide to what to do while the HFT algo computers try to melt the markets up. Could be a correction any day now as we have witnessed the averages melt up since the beginning of January and a breather is in order.
Markets opened flat, mixed and directionless on light red volume. Inverse ETF's were melting up as the $VIX was easing down. Oil was creeping up and the USD was dropping like a rock. Many confusing signals that may or may not get sorted out today.
By 10 the directionless market turned sour as most averages headed south in a big way with the negative report of the Consumer Confidence but didn't go below the premarket lows. Going to be an interesting session.
At 9:45 the MACD was still easing up and $TICK is showing signs of going negative. The S&P/Case-Shiller composite index of 20 metropolitan areas shows home prices slipped 0.1% in November from October on a non-seasonally adjusted basis. Prices were expected to remain unchanged. The gauge jumped 5.5% from the same month in 2011, as expected according to DailyFX easing markets up.
The US Consumer Confidence, rated high, fell to 58.6 vs 64.0 expected and revised to 66.7 from 65.1 and that what sent the markets spiraling downward.
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 13907 up 25 or 0.18%.
The SP500 is at 1500 up 0.09 or 0.01%.
SPY is at 149.93 down 0.14 or 0.09%.
The $RUT is at 903.95 down 3 or -0.31%.
NASDAQ is at 3138 down 15 or -0.49%.
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 down at 97.08 trading between 96.25 and 97.32 and the bias is neutral for the moment.
Gold was up this morning. Currently trading down at 1663.26, trading range is between 1651.00 and 1666.10 with a positive bias.
Dr. Copper is at 3.67 falling from 3.69 earlier.
The US dollar fell from 79.93 earlier to 79.61 and is currently trading up at 79.67.
** RRR = Risk Reward Ratio
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Written by Gary