Markets Melt Up On Anemic Volume

March 26th, 2013
in Gary's blogging

Opening Market Commentary For 03-26-2013

Markets opened up slightly from yesterday's close and continued to melt up for the first 15 minutes on very low volume with several bursts of green volume. Appearances can be deceiving, but in light of the anemic volume it appears the HFT computers are the impetus of the upwards melting of the averages. We haven't seen such a slow opening rise like this in months and I would caution jumping to any conclusions.

By 10 am the averages dropped slightly (+0.20 from +0.50) and appear to start another sideways trading range we have seen over past sessions. The reporting financials were not very good this morning yet the markets remain up, very strange for an even stranger market. Below are the individual reporting.

Follow up:

I am not impressed and what is interesting is that the markets didn't sell off.

The first column is what was reported. The second is what analysts expected and the third is the last report.

The are many theory's where the market is going next but the bottom line is that anyone of them could be correct. Below, Leavitt sums it up nicely.


I believe one of two scenarios will play out.

  1. The market will bust out and rally from the current consolidation pattern.

  2. The market will break down and shake out some of the weak longs; then it will rally.

  3. A third scenario would be a false breakout to the upside followed by #2. In all cases I think the market will move up, and the S&P will make new highs. If I’m wrong, if the market breaks down and never makes a new high, oh well.


Over in Cyprus, the government has decided to keep all of the country's banks closed until Thursday, giving officials two more days to work out measures to avoid a run on deposits. Financial institutions have been closed since March 16th as authorities wrangled over a €10bn bailout agreement with the Troika. This weekend's deal involved forcing big losses on uninsured depositors but saved small depositors.

Asian markets were broadly lower overnight on concerns over the Eurozone crisis as well as speculation that officials in China may take further measures to rein in home prices. China's Vice Minister of Land and Resources, Hu Cunzhi, suggested at the weekend that the government should raise taxes for those with more than two properties.

"With the introduction of property curbs, this could impact the Chinese economy which caused investors to sell the bigger stocks like financials," said Lee Mumford, a financial sales trader at Spreadex.

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: Fell to 88% Down From 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.

The DOW at 10:15 is at 15531 up 84 or 0.58%.

The SP500 is at 1559 up 8 or 0.52%.

SPY is at 155.77 up 0.82 or 0.53%.

The $RUT is at 948.97 up 3 or 0.33%.

NASDAQ is at 3248 up 14 or 0.43%.

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

How Oil Really Gets Priced

WTI oil is trading between 94.62 and 95.70 today. The session bias is neutral to bullish and is currently trading up at 95.60.

More Widening For The Brent/WTI Spread Ahead?

Brent crude is trading between 107.40 and 108.25 today. The session bias is neutral with a a bullish slant and is currently trading up at 108.06.

Gold fell from 1607.00 earlier to 1594.60 and is currently trading up at 1597.17.

Here’s why copper has lost its indicator role

Dr. Copper is at 3.47 up from 3.44 earlier.

The US dollar is trading between 83.09 and 82.91 and is currently trading sideways at 83.01, 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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