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Averages Stop Ascent As Volume Dries Up

March 5th, 2013
in Gary's blogging

Midday Market Commentary For 03-05-2013

By noon the major indices had made their mark for the day displaying new historic highs, in several cases, as trading volume descended to anemic levels. Caution is what many pundits are advising as we are in new unknown territory. My proprietary indicators were bearish several weeks ago and have become progressively more as the averages melt further up. I am not quiet ready to sell more for cash, but I am not ready to short just yet.

The HFT computers may play with the numbers this afternoon and skew the charts.

Follow up:

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 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 is 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 86% and Secondaries Confirm "Tradable" This might be true (for last week anyway), but difficult to deal with. 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 14274 up 146 or 1.04%.

The SP500 is at 1541 up 16 or 1.08%.

SPY is at 154.50 up 1.57 or 1.03%.

The $RUT is at 926.32 up 9.63 or 1.05%.

NASDAQ is at 3224 up 42 or 1.33%.

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

How Oil Really Gets Priced

WTI oil is trading between 91.00 and 89.35 this morning. The session bias is sideways and is currently trading down at 90.30.

More Widening For The Brent/WTI Spread Ahead?

Brent crude is trading between 107.80 and 109.17 this morning. The session bias is slightly bullish and is currently trading down at 108.90.

Gold rose from 1569.00 earlier to 1586.31 and is currently trading down at 1574.15.

Dr. Copper is at 3.52 up from 3.48 earlier.

The US dollar Index is trading at 82.26, even at 0.00.

** 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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