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Indices Fall Off New Highs Amid Low Volume

March 12th, 2013
in Gary's blogging

Midday Market Commentary For 03-12-2013

After setting new highs this morning the shears came out and the 'sheeples' were fleeced with low to moderate red volume. Obviously a lot of profit taking going on but really not sure WHO is doing the trading as the volume is too low to consider an abundance of human participants.

By noon the Indices had been heading in a decent on falling volume when the HFT algo computers marched in and melted the DOW back up to its opening numbers. Overall the markets remained flat, weak, mixed and directionless.

Follow up:

The other major averages didn't do as well and remained in the red as we await any news that might provide direction.

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 12:00 is at 1450 up 3 or 0.02%.

The SP500 is at 1552 down 4 or -0.24%.

SPY is at 155.66 down 0.37 or -0.23%.

The $RUT is at 939.52 down 3 or -0.32%.

NASDAQ is at 3236 down 16 or -0.51%.

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 91.60 and 93.48 today. The session bias is bullish and is currently trading down at 93.10.

More Widening For The Brent/WTI Spread Ahead?

Brent crude is trading between 108.64 and 110.15 today. The session bias is neutral with a bullish slant and is currently trading down at 109.35.

Gold rose from 1576.90 earlier to 1597.75 and is currently trading down at 1592.37.

Dr. Copper is at 3.56 up from 3.50 earlier.

The US dollar is trading between 83.10 and 82.70 and is currently trading down at 82.85, the bias is currently neutral with a bearish slant.

** 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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