Markets Gap Upwards Setting New Highs With Profit Taking

February 13th, 2013
in Gary's blogging

Opening Market Commentary For 02-13-2013

The SP500 futures projected a higher opening for the 500 in the range of 1524 early this morning. That is several points above it highest mark of 1522.24 in yesterday's session. Unless there is a powerhouse of green volume I would be highly suspect of market manipulation by DaBoyz and the HFT computers.

The market gaped up at the opening, as suspected, higher by .2% to .3% with the DOW sitting quietly at .02%. The green volume was low to anemic and that does not bode well for further advancement. At least advancement that will entice investors to jump on the band wagon.

By 10 am this pathetic bull trap didn't last long and a lot of profit taking took place as more investors lighten their portfolios. But just as I typed that last sentence out the 'dippers' rushed in and brought the numbers back up where the 500 posted new highs for the year.

Follow up:

The volume has picked up slightly this morning, but not enough to convince me that this push upward is for real. These types of market movements are normally not possible without investor involvement and one has to look for other causes. The government has been pushing tons of money into this medium for several years, DaBoyz continue to criminally manipulate numbers and the HFT computers creates movements that do not reflect true market prices. This has skewed the charts and other technical indicators of past to the point they are useless except for historical points of reference.

The US markets are over bought, insiders are selling and the mess in the Eurozone hasn't gone away and yet the markets rise on NO VOLUME! Something tells me that this bull party is in for a correction – SOON.

The financial numbers being reported this morning are in the 'not so good' category, in my mind anyway, and shouldn't be able to support a market setting new highs every day.

The RRR** has been narrow at the opening bell for the past several months and has continued the trend again this morning. 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 10:15 is at 14017 down 1.61 or -0.01%.

The SP500 is at 1523 up 4.58 or 0.30%.

SPY is at 152.53 up 0.52 or 0.34%.

The $RUT is at 920.12 up 2.63 or 0.29%.

NASDAQ is at 3203 up 17 or 0.54%.

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

How Oil Really Gets Priced

WTI oil was up this morning and is currently trading down at 97.68 trading between a low of 95.00 and a high of 98.10 and the bias is negative.

More Widening For The Brent/WTI Spread Ahead?

Brent crude was down the up earlier and is currently trading down at 118.63 trading between 118.40 and 119.10 and the bias is neutral to bearish.

Gold was falling this morning and then rose to its previous highs before falling near its morning lows. Currently trading down at 1644.31, trading range is between 1668.48 and 1642.55 with a negative bias.

Dr. Copper is at 3.75 up from 3.71 earlier.

The US dollar is trading in a narrow range this morning from a high of 80.18 earlier to 79.92 and is currently trading sideways at 80.07.

** 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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