SP500 New High Did Not Hold – Averages Fell

February 12th, 2013
in Gary's blogging

Closing Market Commentary For 02-12-2013

The afternoon session began with the averages continuing to melt up on falling volume and you and I know very well that this can not continue to reflect a true market direction. The HFT computers are mostly the culprit in this latest rise, but that may bring in the sheeples for the eventual slaughter too.

By 4 pm the averages melted down as I suspected they would, but still surprised how far the SP500 climbed up the charts to 1522.29 before heading down again. Is that the top or are we going to see more of the HFT computer induced melting up? Markets closed mixed, directionless, and flat. Nothing to see here, keep moving, er, selling.

Follow up:

Like a lot of other analysis, I have wondered what will be the straw that breaks the Markets back and Obama's PSOTU tonight may be it.


Will the State of the Union Stop the Bull Stampede?

Breakout Jeff Saut, chief investment strategist at Raymond James, is calling for a 5% to 7% short-term sell-off that could be triggered by the State of the Union this evening.

The RRR** has been narrow at the opening bell for the past several months and has continued the trend into the closing session. This continuing trend makes predictions of session movements nearly impossible making trading futile and unprofitable. As of right now, 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 over the past year. 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 14018 up 47 or 0.34%.

The SP500 is at 1519 up 2.42 or 0.16%.

SPY is at 152.11 up 0.31 or 0.20%.

The $RUT is at 917.52 up 4.49 or 0.49%.

NASDAQ is at 3186 down 5.51 or -0.17%.

The longer trend is up, the past months trend is bullish and the current bias is down.

How Oil Really Gets Priced

WTI oil was up this morning and is currently trading sideways at 97.43 trading between 95.07 and 97.80 and the bias is slightly negative.

More Widening For The Brent/WTI Spread Ahead?

Brent crude was up earlier and is currently trading up at 118.68 trading between 117.50 and 118.91 and the bias is slightly positive.

Gold was generally down this morning. Currently trading up at 1651.14, trading range is between 1668.30 and 1639.08 with a positive bias.

Dr. Copper is at 3.74 up from 3.72 earlier.

The US dollar fell from 80.59 earlier to 79.99 and is currently trading up at 80.14.

The 500 at the close.

The DOW at the close.

** RRR = Risk Reward Ratio

To contact me with questions, comments or constructive criticism is always encouraged and appreciated:


Written by Gary

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