Averages Melt Up, Low Volume And Lackluster

March 11th, 2013
in Gary's blogging

Midday Market Commentary For 03-11-2013

Averages melted up from the morning lows with the DOW and the 500 setting new historical highs. Volume is anemic and suspect the HFT computers for the latest run up of the numbers.

The pain of the fall will be soon evident.

Follow up:

Several pundits are claiming that now is not the time to abandon the market but there are plenty of reason to reduce your portfolio. One said, “Don’t over-analyze the market. It’s ok to listen to the perma bears a little because they keep you grounded and preclude you from getting too one-sided in your thinking, but don’t let them talk you out of a trade.” Personally, the recent events preclude dipping my toes in although I agree on do not over analyze the market. Low volume is just one reason to be cautious.


NYSE Matched Volume Drops To New Decade Low In February

Someone is obviously not complying with the central-planner script and rotating fast enough into equities.

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 87% 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 12:30 is at 14420 down 22.81 or -0.15%.

The SP500 is at 1552 up 1.30 or 0.08%.

SPY is at 155.66 up 0.21 or 0.16%.

The $RUT is at 941.27 down 1.23 or -0.13%.

NASDAQ is at 3243 down 1 or -0.03%.

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

How Oil Really Gets Priced

WTI oil is trading between 92.00 and 90.90 today. The session bias is bearish and is currently trading up at 91.31.

More Widening For The Brent/WTI Spread Ahead?

Brent crude is trading at 109.54 today.

Gold traded from 1583.20 earlier to 1576.45 and is currently trading sideways at 1579.67.

Dr. Copper is at 3.51 down from 3.52 earlier.

The US dollar is trading between 82.66 and 83.12 and is currently trading down at 82.97, the bias is currently neutral.

** 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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