Opening Market Commentary For 03-07-2013
Early premarket numbers were flat and rose 0.15% after the better than expected weekly jobless claims. Shortly after the employment reports the premarket numbers started to descend to yesterday's closing numbers.
Markets opened flat with the DOW up 0.02% and the SP500 up $0.01 and the $RUT down $0.04. The volume is low and mixed with the bears and bulls trading in a 'cautious' manner. The DOW set a new high of 14344 early on while the SP500 climbed to 1545 closing in on a previous high of ~1565 which would form a triple top.
By 10 the averages paused to take a breather leaving traders wondering what is going to happen next.
Leavitt put everything into perspective nicely.
Vocal analysts are very divided. Some say a top is forming and the S&P is headed back under 1000. Others say we’re in the beginning stages of a massive rally.
We’re not talking about small percentage differences here; we’re talking about whether the S&P will drop to 900 or rally to 1800.
But don’t worry about those who are wrong. They’ll keep their jobs…and we should be happy they do. We need people on both sides of the debate in order for Wall St. to function smoothly.
More news on the employment scene, Global outplacement consultancy Challenger, Gray & Christmas reports U.S. employers cut 55,356 jobs in February, up 37% from 40,430 in January.
“The Labor Department reports weekly jobless claims fell 7,000 to 340,000, declining for a second straight week. Economists expected claims to rise to 355,000. Continuing claims rose to 3.094 million from 3.091 million the week prior.”
“The U.S. trade deficit expanded to $44.45 billion in January from $38.14 billion in December. Economists expected the gap between exports and imports to widen to $42.6 billion. Exports were down 1.2% for the month as imports increased 1.8%.”
The RRR** has been narrow at the opening bell for the past several months, over a year actually, 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. 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 10:15 is at 14339 up 44 or 0.31%.
The SP500 is at 1543 up 1.62 or 0.11%.
SPY is at 154.73 up 0.21 or 0.14%.
The $RUT is at 930.99 up 0.98 or 0.11%.
NASDAQ is at 3224 up 2 or 0.06%.
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 89.58 and 91.37 this morning. The session bias is positive and is currently trading up at 91.29.
Brent crude is trading between 110.04 and 108.80 this morning. The session bias is neutral and is currently trading up at 109.30.
Gold rose from 1567.00 earlier to 1585.50 and is currently trading down at 1579.22.
Dr. Copper is at 3.53 up from 3.49 earlier.
The US dollar is trading between 82.65 and 81.99 and is currently trading up at 82.08, the bias is currently negative.
** RRR = Risk Reward Ratio
To contact me with questions, comments or constructive criticism is always encouraged and appreciated:
Written by Gary