February 20th, 2013
in Gary's blogging
Midday Market Commentary For 02-20-2013
Up to the noon hour markets have made a slow but deliberate decline with 'moderate' red volume. There is still very little indication of direction as the averages really haven't dropped below yesterday's session opening. Perhaps the HFT computers will end today's fall and melt back up a bit, but it is difficult to ascertain what is going to happen next.
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 jump in to catch the highs and still may be too early to start shorting.
As long as market volume remains light or the trading range is narrow, one can expect successful, or at least profitable, trading to remain elusive. The RRR** has been wider on some volatile sessions lately and is expected to become more so as 2013 enters the first quarter, but unfortunately 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: Drops to 82% 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 12:15 is at 14015 down 20 or -0.14%.
The SP500 is at 1525 down 6 or -0.40%.
SPY is at 152.70 down 0.55 or -0.36%.
The $RUT is at 926.99 down 5 or -0.54%.
NASDAQ is at 3196 down 16.75 or -0.52%.
The longer trend is up, the past months trend is bullish, the past 5 sessions have been bullish and the current bias is up.
WTI oil is trading between 94.00 and 97.08 this morning. The session bias is up and is currently trading down at 94.57. The session bias is bearish.
Gold fell from 1618.22 earlier to 1577.80 and is currently trading down at 1582.11. The bias is very bearish.
Dr. Copper is at 3.61 down from 3.74 earlier.
The US dollar rose from 80.35 earlier to 80.74, paused then melted up to 80.88 and is currently trading down at 80.81. The bias is neutral to bullish.
** RRR = Risk Reward Ratio
To contact me with questions, comments or constructive criticism is always encouraged and appreciated:
Written by Gary