January 30th, 2013
in Gary's blogging
Closing Market Commentary For 01-30-2013
No surprises from the FOMC and the markets remain almost flat after the meeting announcement. The Russell 2000 started to fall almost immediately which is something like the canary in the coal mine warning of danger.
Markets closed down, flat and in my opinion, directionless. Yes, they are down, but not out as they say. Anything could push the averages higher OR lower for that matter. It 'looks' like we are going to see more 'correction', but I wouldn't bet on this market behaving like you would like it to.
The RRR** has been narrow at the opening bell for the past several months and continued the trend again into the closing session. This continuing trend makes predictions of session movements nearly impossible making trading futile and unprofitable. Buying shorts or longs at this point is probably not wise from a RRR** standpoint.
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: Rises To 87% 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 13910 down 44 or -0.32%.
The SP500 is at 1502 down 5.88 or -0.39%.
SPY is at 150.04 down 0.63 or -0.42%.
The $RUT is at 896.91 down 10.40 or -1.15%.
NASDAQ is at 3142 down 11.35 or -0.36%.
The longer trend is up, the past months trend is bullish and the current bias is down.
WTI oil was rose this morning and is currently trading up at 98.03 trading between 95.50 and 98.25 and the bias is positive.
Gold was up this morning. Currently trading down at 1676.30, trading range is between 1651.65 and 1682.83 with a negative bias.
Dr. Copper is at 3.75 up from 3.65 earlier.
The US dollar fell from 79.75 earlier to 79.20 and is currently trading down at 79.31.
The 500 at the close.
The DOW at the close.
** RRR = Risk Reward Ratio
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Written by Gary