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Markets Close Up But Flat And Directionless

March 1st, 2013
in Gary's blogging

Closing Market Commentary For 03-01-2013

Markets closed after trading in a very narrow range since 12:30 pm. The DOW was within 38 points while the SP500 stayed within 5 points during some tumultuous red volume spurts not seen since Monday's 'big fall'. The bulls obviously haven't given up and the bears are totally convinced as they duke it out. No big selloff or buying spree, just a 'normal' close as the HFT computers shut down for the day.

Follow up:

Druckenmiller: "I See A Storm Coming"

Hedge fund icon Stanley Druckenmiller . . . saying that he’s decided to speak out now because he sees "a storm coming, maybe bigger than the storm we had in 2008, 2010."

He said, "While everybody is focusing on the here and now, there's a much, much bigger storm that's about to hit...” While not exactly Maxine Waters' sequestration-based 170 million job loss, this concerning interview is must-see for his clarity and forthrightness from who is to blame, to the consequences of gridlock, our society's short-term thinking, and the concerning demographics the US

The RRR** has been narrow at the opening bell for the past several months, over a year actually, and has continued the trend into the closing 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: Rises to 85% 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 4:00 is at 14089 up 35.17 or 0.25%.

The SP500 is at 1518 up 3.53 or 0.23%.

SPY is at 152.07 up 0.45 or 0.30%.

The $RUT is at 914.73 up 3.62 or 0.40%.

NASDAQ is at 3169 up 9.55 or 0.30%.

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

How Oil Really Gets Priced

WTI oil is trading between 93.20 and 90.27 this morning. The session bias is bearish and is currently trading up at 90.96.

More Widening For The Brent/WTI Spread Ahead?

Brent crude is trading at 108.74.

Gold fell from 1615.75 earlier to 1665.40 and is currently trading down at 1576.05.

Dr. Copper is at 3.51 falling from 3.55 earlier.

The US dollar is trading between 81.85 and 82.58 and is currently trading down at 82.50, the bias is currently bullish.

The 500 at the close.

The DOW at the close.

** RRR = Risk Reward Ratio

To contact me with questions, comments or constructive criticism is always encouraged and appreciated:

gary@econintersect.com

Written by Gary









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