February 11th, 2013
in Gary's blogging
Closing Market Commentary For 02-11-2013
The SP500 made a new high at 3:45 (1518.31) which is precisely the same number made on 2-8 – interesting! Low volume prevailed throughout the session and the bulk of the transactions was from the HFT algo computers. The $VIS is hovering at 13, $TRIN has been below 80 all session after dropping from 170 at the opening. The big question on everyone’s mind is what is Mr. Market going to do next?
The markets closed without any fanfare with the 500 backing off, again, the 1800 resistance line in the sand. The thought that a 'correction' is just around the corner has a lot of investors timid about 'dipping' their toes into this murky casino.
It remains to be seen if the 500 can break through this resistance. The DOW, NASDAQ and $RUT have not played much in the last several sessions, but suspect they would explode it the 500 did more than 'melt' up higher.
What was 'normal' 5 years ago does not apply to the market place of today. The mom and pop investors are largely out and the big institutions have little reason to sell. Many of them are fully vested and have little cash to move the markets up. I expect what movement we see over the next several weeks will a slow melting up to 'slightly' higher numbers for all of the averages, but nothing else.
The higher we get also raises the probability of a greater 'correction', but I have been saying this for months. Time will tell!
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 13971 down 21 or -0.16.
The SP500 is at 1517 down 0.92 or -0.06%.
SPY is at 151.72 down 0.05 or -0.03%.
The $RUT is at 913.03 down 0.64 or -0.07%.
NASDAQ is at 3192 down 1.871 or -0.06%.
The longer trend is up, the past months trend is bullish and the current bias is neutral with a slightly bearish slant.
WTI oil was down this morning and recently rose to make new highs for the day and is currently trading up at 97.00 trading between 97.08 and 94.98 and the bias is positive.
Brent crude was down earlier and is currently trading sideways at 118.28 trading between 119.08 and 117.54 and the bias is positive to neutral.
Gold was down this morning. Currently trading down at 1649.54, trading range is between 1668.75 and 1643.59 with a neutral bias.
Dr. Copper is at 3.73 falling from 3.77 earlier.
The US dollar rose from 80.17 earlier to 80.47 and is currently trading down at 80.36 after having recently falling to 80.24.
The 500 at the close.
The DOW at the close.
** RRR = Risk Reward Ratio
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Written by Gary