Markets Close Gaps Melt Back Up And Pause

March 8th, 2013
in Gary's blogging

Midday Market Commentary For 03-08-2013

The averages spent the morning melting back up to the initial opening numbers after closing the large gap created at the opening. By noontime most of the indices were indicating weakness and falling volume showing up as flat and directionless.

Where we go from here is anyone’s guess.

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 again today. 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 12:15 is at 14363 up 35 or 0.24%.

The SP500 is at 1547 up 3 or 0.21%.

SPY is at 155.12 up 0.35 or 0.23%.

The $RUT is at 939.96 up 5 or 0.58%.

NASDAQ is at 3238 up 7 or 0.21%.

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

How Oil Really Gets Priced

WTI oil is trading between 91.71 and 90.85 today. The session bias is actually neutral as it is bouncing from its lows and highs and is currently trading down at 91.12.

More Widening For The Brent/WTI Spread Ahead?

Brent crude is trading between 109.76 and 107.99 this morning. The session bias is negative and is currently trading down at 108.65.

Gold fell from 1585.00 earlier to 1562.50 and is currently trading down at 1576.72.

Dr. Copper is at 3.51 falling from 3.53 earlier.

The US dollar is trading between 82.00 and 82.94 and is currently trading up at 82.83, the bias is currently bullish.

** 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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