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Averages Up On Low Volume And Directionless

March 19th, 2013
in Gary's blogging

Opening Market Commentary For 03-19-2013

Markets opened up on low volume but have remained below yesterday's highs with the exception of the small caps. The NASDAQ has melted above yesterday's highs but remain below Friday's high mark. All in all the blow from Cyprus is still lingering in the minds of investors as they await some divining news from above. Basically the markets are moving sideways.

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 91% and Secondaries Confirm "Tradable" This might be true (and difficult to believe), but challenging to deal with. The trading range is so narrow that way too much 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 10:00 is at 14499 up 46 or 0.32%.

The SP500 is at 1555 up 3 or 0.22%.

SPY is at 155.34 up 0.35 or 0.23%.

The $RUT is at 950.28 up 3 or 0.33%.

NASDAQ is at 3247 up 10 or 0.30%.

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

** 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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