February 11th, 2013
in Gary's blogging
Opening Market Commentary For 02-11-2013
For a brief moment in time the SP500 futures were higher than Friday's highs and suggested that we were going to have a gap up up for the cash crowd. By 9 am the futures leveled out at the closing prices of Friday and leaving a serious doubt to where the averages were going to go today.
Markets melted down just a 'tad' at the opening on low volume keeping the suspense of market direction in question. By the 15 minute mark the volume was falling, averages were off and flat and every investor was scratching his head. There were a few signs that indicated market direction however.
The 'gold' was falling as well as the WTI. The USD was rising indicating a market falling but the lack of conviction from investors was compelling. Was the market now fully invested by those that were going to participate or was the cash crowd still sitting this intermission out and waiting?
By 10 am volumes remained low and directionless. Where were the HFT computers and why weren’t they pushing the markets higher? By 10:15 the market was going nowhere.
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.
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 13962 down 30 or -0.22.
The SP500 is at 1516 down 1.65 or -0.11%.
SPY is at 151.70 down 0.09 or -0.06%.
The $RUT is at 911.64 down 2 or -0.22%.
NASDAQ is at 3188 down 5.52 or -0.17%.
The longer trend is up, the past months trend is bullish and the current bias is neytral.
WTI oil was down this morning and is currently trading up at 95.51 trading between 95.91 and 94.98 and the bias is negative.
Brent crude was down earlier and is currently trading sideways at 117.94 trading between 119.08 and 117.54 and the bias is negative.
Gold was down this morning. Currently trading sideways at 1650.99, trading range is between 168.75 and 1643.59 with a negative bias.
Dr. Copper is at 3.72 falling from 3.77 earlier.
The US dollar rose from 80.17 earlier to 80.47 and is currently trading down at 80.44.
** RRR = Risk Reward Ratio
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Written by Gary