New Highs On Low Volume – Market Is Tired

February 1st, 2013
in Gary's blogging

Closing Market Commentary For 02-01-2013

Markets closed on an up note but with a serious doubt on whether or not it can continue much higher. The financial numbers this morning were not all that good and the serious issues that remain in the EZ are still there and Mr. Market is ignoring them which I feel is a serious mistake. This rooster will come home to roost, just when is the question. Have a great weekend and I am off on Monday, see everyone on Tuesday.

Follow up:

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. It is too late to catch the highs and may be too early to start shorting.

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 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 14008 up 148.14 or 1.07%.

The SP500 is at 1513.15 up 15.04 or 1.03%.

SPY is at 151.23 up 1.53 or 1.02%.

The $RUT is at 911.13 up 9.05 or 1.00%.

NASDAQ is at 3179 up 36.97 or 1.18%.

The longer trend is up, the past months trend is bullish and the current bias is up.

How Oil Really Gets Priced

WTI oil was down this morning and is currently trading sideways at 97.64 trading between 98.20 and 96.55 and the bias is neutral.

Brent crude was up earlier and is currently trading sideways at 116.64 trading between 116.97 and 115.25 and the bias is neutral.

Gold was up this morning. Currently trading down at 1669.19, trading range is between 1656.75 and 1681.35 with a negative bias.

Dr. Copper is at 3.78 up from 3.70 earlier.

The US dollar fell from 79.27 earlier to 78.94 and is currently trading up at 79.19. (Gap was covered at 79.26 moving up to 79.32 before retracting. Then it dropped to the morning lows of 78.94 and has been recovering.)

** RRR = Risk Reward Ratio

To contact me with questions, comments or constructive criticism is always encouraged and appreciated:

Written by Gary

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