Markets Melting Down, But Remain Flat

February 15th, 2013
in Gary's blogging

Midday Market Commentary For 02-15-2013

At 10:30 am the 500 dipped into the red, -0.03, for the first time this session followed by SPY at -0.01 while the rest remained flat and uninspiring. Although volume has remained 'elevated' the market movement looks dull and lackluster. By 11:30 almost all of the averages were in the red, still marginally flat, but in the red with volume still on the elevated side which is unusual for this time of the day.

By noon Mr. Market has decided to melt the averages down, but not so far down to set a trend as they bounced from green to red and back again. Mr. Market obviously want to keep you guessing for a while longer. Only the Russell 2000 remained up during this dance, which in its self is also unusual.

Follow up:

The University of Michigan Confidence, rated high, came in higher at 76.3 from the expected 74.8 and way above the last report of 73.8, yet the markets eased down. What does this tell us? I don't have a fricken clue except the same old problems in Europe and the US haven't gone away so I expect, like others, to see a consolidation soon. When become the question, not if.

The RRR** has been narrow at the opening bell for the past several months and has continued the trend into the midday 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, if in fact we are really at one, 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 12:00 is at 13971 down 3 or -0.02%.

The SP500 is at 1520 down 1.47 or -0.10%.

SPY is at 152.12 down 0.17 or -0.12%.

The $RUT is at 924.87 up 1.08 or 0.12%.

NASDAQ is at 3196 down 2.40 or -0.08%.

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 down this morning and is currently trading down at 95.50 trading between 97.45 and 95.32 and the bias is negative.

Gold was down this morning. Currently trading up at 1608.12, trading range is between 1662.00 and 1598.40 with a negative bias.

Dr. Copper is at 3.73 down from 3.76 earlier.

The US dollar rose from 80.30 earlier to 80.66 and is currently trading sideways at 80.58.

From Leavitt this morning.


The S&P is up 3.5 for the week. If it can resist dropping that amount today, it’ll be the index’s 7th consecutive up week. You have to go back to the end of 2010 and beginning of 2011 for such a streak.

But the upside progress isn’t anything to get excited about, and volume is declining. The market keeps going and going and going regardless of what’s put in its path. It’s not wise to fight it; it’s also not wise to throw all caution to the wind and assume it’ll continue uninterruptedly.

I’m not one for guessing top and prefer leaving that to others. I’ve seen it too many times over the years – traders miss huge moves because they think a top is coming or forming. And then 100 S&P points later they’re still sitting on the sidelines. Rallies last longer than you think. They don’t end when they should, they end when the last of the bears throws in the towel.

** 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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