February 1st, 2013
in Gary's blogging
Midday Market Commentary For 02-01-2013
By 12:00 the markets had risen to new highs once again proving some bearish pundits wrong or at least too soon in their prognosticating. The large caps are green but do not appear to be over exuberant as the small caps seem to be. The $VIX is falling, $TICK is rising and generally the markets are clawing into that upper resistance looking bullish.
It has been a long slug for the markets lately and I believe it is time to rest, but so far today Mr. Market does not agree with me.
More on the ISM manufacturing reporting.
More on January ISM Manufacturing: All five of the index components rose to over for the month, with new orders jumping to 53.3 from the previous mark 49.7. The largest change of the month was the reading on inventories, rising 8% to 51.0. Overall, the index hit its highest level since April.
The RRR** has been narrow at the opening bell for the past several months and continued the trend into the midday 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 12:30 is at 13996 up 135 or 0.98%.
The SP500 is at 1513 up 15 or 1.00%.
SPY is at 151.25 up 1.55 or 1.04%.
The $RUT is at 912.67 up 10.56 or 1.17%.
NASDAQ is at 3180 up 38 or 1.23%.
The longer trend is up, the past months trend is bullish and the current bias is up.
WTI oil was down this morning and is currently trading down at 97.69 trading between 98.20 and 96.55 and the bias is positive.
Brent crude was up earlier and is currently trading up at 116.84 trading between 116.97 and 115.25 and the bias is neutral.
Gold was up this morning. Currently trading up at 1672.65, trading range is between 1656.75 and 1681.35 with a neutral 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 79.05. (Gap was covered at 79.26 moving up to 79.32 before retracting. Then it droped to the morning lows of 78.94 and has been recovering.)
** RRR = Risk Reward Ratio
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Written by Gary