February 8th, 2013
in Gary's blogging
Closing Market Commentary For 02-08-2013
Markets closed up and without much fanfare this Friday afternoon. The DOW and the $RUT slipped during the afternoon session and showed a distinct bearish melting while the SP500 continued to bump up on the highs and continued in a sideways fashion.
Personally, I believe the averages can move up higher to previous highs made years ago, but the outcome scenario is invariable the same and that is a collapsing market. If I could correctly guess when that would happen, I would be the next George Soros. Many respected pundits expect the market to contract, some more than other, sometime in the future.
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 13992 up 48.92 or 0.35%.
The SP500 is at 1517.93 up 8.54 or 0.57%.
SPY is at 151.70 up 0.74 or 0.49%.
The $RUT is at 913.67 up 5.57 or 0.61%.
NASDAQ is at 3193 up 28.74 or 0.91%.
The longer trend is up, the past months trend is bullish and the current bias is sideways.
WTI oil was up this morning and is currently trading down at 95.78 trading between 95.10 and 96.57 and the bias is negative.
Brent crude was up earlier and is currently trading down at 118.85 trading between 115.10 and 119.17 and the bias is positive.
Gold was down this morning. Currently trading up at 1668.35, trading range is between 1662.31 and 1682.10 with a neutral to negative bias.
Dr. Copper is at 3.76 up from 3.73 earlier.
The US dollar fell from 80.33 earlier to 80.01 and is currently trading higher at 80.30.
** RRR = Risk Reward Ratio
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Written by Gary