February 7th, 2013
in Gary's blogging
Midday Market Commentary For 07-07-2013
Well we had the dippy-do and still the averages have not made their intentions known. Yes, the DOW is off over 100 points, but that doesn't mean a lot nor does it set any kind of record. Still within the sideways channel started 6 sessions ago but with a 'tad' higher red volume – hard to tell who or what is doing the profit taking.
Is this a prelude to bigger declines or advances to come, flip that coin for the best answer. I am mostly cash and waiting (see article at end).
Not much to report.
The markets are coming under heavy selling pressure as traders take cover in safe havens like utility, and consumer discretionary stocks, as well as U.S. Treasury bonds. The Dow is down 100 points, or 0.7%, while the broader S&P 500 is off 0.6%. The yield on the 10-year Treasury is down 0.016-percentage point to 1.947% as traders bid up the asset.
The RRR** has been narrow at the opening bell for the past several months and continued the trend into the midday sessiong. 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 12:15 is at 13873 down 112 or -0.81%.
The SP500 is at 1502 down 10 or -0.67%.
SPY is at 150.23 down 0.93 or -0.62%.
The $RUT is at 904.38 down 6.91 or -0.76%.
NASDAQ is at 3147 down 21 or -0.66%.
The longer trend is up, the past months trend is bullish and the current bias is down.
WTI oil was up this morning and is currently trading down at 95.83 trading between 95.10 and 97.21 and the bias is negative.
Brent crude was up earlier and is currently trading down at 116.94 trading between 115.10 and 117.82 and the bias is negative.
Gold was down this morning. Currently trading down at 1674.92, trading range is between 1684.55 and 1663.35 with a negative 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 80.31.
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.
** RRR = Risk Reward Ratio
To contact me with questions, comments or constructive criticism is always encouraged and appreciated:
Written by Gary