February 15th, 2013
in Gary's blogging
Opening Market Commentary For 02-15-2013
Premarkets were off slightly with the DOW down 11 points and most other averages were also flat. By the opening bell the averages had melted up into the green zone, DOW up 4, under moderate volume where the bulls and bears were battling it out for position.
This ensuing skirmish soon was being won by the profit takers and the averages melted back down approaching the closing numbers of yesterday's session. By 10, in typical Mr. Market fashion, the averages melted back up again a few cents.
Empire Manufacturing index is rate low in importance, but may indicate to some that 'things' are improving slightly.
The New York Federal Reserve's regional manufacturing gauge rose to 10.04 in February -- its highest level since May 2012 -- from -7.78 in January. The gauge was expected to rise to -2. Readings above zero point to expansion, while those below indicate contraction.
The Net Long-term TIC Flows was up to 64.2 billion when analysis only expected 35 billion. This index summarizes the flow of stocks, bonds, and money market funds to and from the United States. A positive figure indicates that more capital is entering the US than leaving as sales of American securities to foreigners exceed American purchases of foreign securities.
However the manufacturing and industrial production, rate medium importance, was off enough to raise eyebrows, yet the markets shrugged this new off and rose higher.
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 13991 up 27 or 0.19%.
The SP500 is at 1523 up 2.44 or 0.16%.
SPY is at 152.55 up 0.28 or 0.19%.
The $RUT is at 925.59 up 1.83 or 0.20%.
NASDAQ is at 3206 up 7 or 0.22%.
The longer trend is up, the past months trend is bullish and the current bias is up.
WTI oil was down this morning and is currently trading down at 95.52 trading between 97.45 and 95.32 and the bias is negative.
Gold was down this morning. Currently trading down at 1610.75, trading range is between 1662.00 and 1608.85 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 up at 80.62.
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
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Written by Gary