February 21st, 2013
in Gary's blogging
Opening Market Commentary For 02-21-2013
Yesterday's decline wasn't a surprise as it has been expected for the past couple of sessions. A correction is needed from time to time to reset the charts but don't think this is a trend just yet as there are plenty of recent examples where we headed back up a session or two after the 'minor' decline.
The premarket was down, trading in a narrow range and I expect another gap down for the cash crowd at the opening.
The markets did open down under moderately heavy volume with a spike of dippers jumping in for what they thing is just another dip to take advantage of. By 10 am the averages had bottomed with a large spike of red volume and the various markets started to rend sideways making trend predictions difficult for the day.
This decline might or might not be the start of a larger fall in the averages so be on your toes. Yesterday's volume was moderately high but no where near the 8-2011's 'crash' red volume that was 10 times yesterday's. One Pundit says were will see the DOW reach 14098 before any serious decline will begin.
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 jump in to catch the highs and still may be too early to start shorting. If you were able to jump on the train yesterday afternoon you could have cashed in on a good scalp.
Yesterday had relatively heavy volume, however 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. 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 13852 down 75 or -0.54%.
The SP500 is at 1501 down 10 or -0.66%.
SPY is at 150.45 down 0.89 or -0.59%.
The $RUT is at 909.38 down 4 or -0.45%.
NASDAQ is at 3141 down 24 or -0.74%.
The longer trend is up, the past months trend is bullish, the past 5 sessions have been bullish and the current bias is neutral to bearish.
WTI oil is trading between 97.11 and 92.64 this morning. The session bias is bearish and is currently trading down at 92.81.
Gold rose from 1554.57 earlier to 1580.85 and is currently trading up at 1580.19.
Dr. Copper is at 3.55 falling from 3.74 earlier.
The US dollar rose from 80.68 earlier to 80.61 and is currently trading down at 81.41.
** RRR = Risk Reward Ratio
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Written by Gary