February 7th, 2013
in Gary's blogging
Closing Market Commentary For 07-07-2013
Today's session looked like yesterday's except exaggerated. Started out down and then melted back up all on moderately low volume and help from the HFT algo computers. The range for the SP500 was narrow ~13 points while the DOW was ~130 points and the NASDAQ was only 32 points. They all ended up in the red, never seeing green in what is best described as a dull and lackluster session. The narrow channel markets have been following for the past 6 sessions has not been broken and previous sideways movements have resulted in a correction of sorts.
This correction has not happened and I suspect we will see serious challenge to the resistance that lies above tomorrow or early next week.
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 13944 down 42 or -0.30%.
The SP500 is at 1509 down 3 or -0.18%.
SPY is at 150.87 down 0.29 or -0.19%.
The $RUT is at 908.10 down 3.19 or -0.35%.
NASDAQ is at 3165 down 3.35 or -0.11%.
The longer trend is up, the past months trend is bullish and the current bias is up.
WTI oil was up this morning and is currently trading down at 95.79 trading between 95.10 and 97.21 and the bias is neutral.
Brent crude was up earlier and is currently trading up at 117.28 trading between 115.10 and 117.82 and the bias is negative.
Gold was down this morning. Currently trading down at 1671.23, trading range is between 1684.55 and 1663.35 with a neutral bias.
Dr. Copper is at 3.73 down from 3.79 earlier.
The US dollar fell from 79.86 earlier to 79.58 and is currently trading just below at a new high (80.35) at 80.28.
This following article is a must read on where we are today and where we are going. An in-depth critique of the market place with a ten step how to approach the current market.
by Lance Roberts
There have been several articles as of late discussing that the next great secular bull market has arrived. Historically, secular bear markets have averaged about 14 years, and considering that we began writing about the current secular bear market cycle in early 2000, that would put the current cycle about 2 years away from it historic average.
However, the reality is that this cycle is currently unlike anything that we have witnessed in the past. ...[W]e are likely closer to the end than the beginning, and the next major stock market correction will likely be the last for this cycle.
The 500 at the close.
The DOW at the close.
** RRR = Risk Reward Ratio
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Written by Gary