Markets Open Up But Melt Downwards

February 22nd, 2013
in Gary's blogging

Opening Market Commentary For 02-22-2013

Premarket numbers were up nicely this morning with the DOW up 73, SP500 up 8 and the NASDAQ up 15. Oil, gold and copper reported down and the US dollar is up. Quite a mixture, however as long as the US dollar rises I expect the markets to eventually weaken.

Markets did open up and above yesterday's high mark, but immediately started to melt down. By 10 am the markets were still in the green, but flat with low volume. This is again one of those days where direction is not to be found.

Follow up:

The bulls are trying to explain today why the market is going to continue to go up while the bearish pundits are feverishly trying to extol reasons why we are still going to melt down. It seems no one really has a clue to what Mr. Market is going to do next.



After two crummy trading days in a row, markets could be quiet to close out
the week, with no major economic or corporate reports on tap.


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.

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 13922 up 41 or 0.30%.

The SP500 is at 1507 up 5 or 0.33%.

SPY is at 150.98 up 0.59 or 0.39%.

The $RUT is at 911.65 up 6.26 or 0.69%.

NASDAQ is at 3146 up 43 or 0.31%.

The longer trend is up, the past months trend is bullish, the past 5 sessions have been neutral and the current bias is down.

How Oil Really Gets Priced

WTI oil is trading between 94.76 and 92.45 this morning. The session bias is bearish and is currently trading down at 92.74.

Gold fell from 1586.00 earlier to 1570.00 and is currently trading up at 1575.05.

Dr. Copper is at 3.54 falling from 3.59 earlier.

The equity market for its part appears to be banking on a full, and fairly speedy, recovery for the global economy”, according to Charles Schwab.

Copper thus far isn't showing the same economic luster.  Strikingly, copper inventories tracked by the London Metal Exchange have risen noticeably since mid October, which has helped keep prices in check.
Read more:

The US dollar rose from 81.26 earlier to 81.69 and is currently trading down at 81.65.

** 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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