February 5th, 2013
in Gary's blogging
Opening Market Commentary For 02-05-2013
Yesterday's decline wasn't enough to get all worried about as it stayed within reasonable boundaries. Nothing special other to say it was about time the markets retracted a bit. The futures were up this morning indicating a gap up for the cash crowd.
The markets did open up generally about where they opened up yesterday and melted up a few points further. The Russell 2000 and the NASDAQ on the other hand gaped up above yesterday's midday levels indicating some strength in the small caps. I can not see anything in the mornings action that would indicate a further decline in the immediate future. As far as I am concerned, the markets are still down from yesterday. At the same time, I do not see the averages moving above the resistance zone they tried unsuccessfully to climb through last week either.
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. It is too late to catch the highs and may be too early to start shorting, be careful.
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 10:15 is at 13998 up 118 or 0.85%.
The SP500 is at 1508 up 12 or 0.84%.
SPY is at 150.79 up 1.25 or 0.83%.
The $RUT is at 905.53 up 6 or 0.70%.
NASDAQ is at 3149 up 18 or 0.58%.
The longer trend is up, the past months trend is bullish and the current bias is up to sideways.
WTI oil was up this morning and is currently trading up at 96.96 trading between 95.95 and 97.08 and the bias is positive.
Brent crude was up earlier and is currently trading up at 116.93 trading between 114.90 and 116.98 and the bias is positive.
Gold was up and then descended this morning. Currently trading down at 1673.73, trading range is between 1670.85 and 1684.90 with a negative bias.
Dr. Copper is at 3.77 down from 3.79 earlier.
The US dollar fell from 79.80 earlier to 79.50 and then rose back up to 79.81 before falling again and is currently trading down at 79.64.
** RRR = Risk Reward Ratio
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Written by Gary