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Markets Open Flat But Weakness Melts Them Down

April 3rd, 2013
in Gary's blogging

Opening Market Commentary For 04-03-2013

Premarkets were up +0.10 earlier and dropped to even just prior to the opening. The suspected decline was due to the fact that private employers only added 158 K down from February's gain of 237 K.

Markets opened in the green, but literally flat with the DOW at +0.05% and the $RUT at +0.15% on mostly low to moderate red volume. By the 15 minute mark the indices began melting down apparently in anticipation of the ISM non manufacturing composite report at 10 am. Which came in at 54.4 while analysts were expecting 55.5 pushing the averages further down.

By 10:15 the averages were clearly in negative territory as volume was starting to fall leaving manipulation by the HFT computers.

Follow up:

This contraction depressed the markets even more which begs the question, “Who knew these numbers beforehand”? This markets is so rigged that the small investor doesn't have a chance.

What we read this morning.

Private-payrolls growth slows

ADP March Private Jobs Miss, Lowest Since October

China to overtake U.S. as biggest oil importer

Something’s Not Right About This Rally

 

The RRR** has been narrow at the opening bell for the past several months, over a year actually, although somewhat wider this morning. However the continuing low volume 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: Unchanged at 88% and Secondaries Confirm "Tradable" This might be true, 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 10:15 is at 14622 down 40 or -0.27%.

The SP500 is at 1562 down 7 or -0.46%.

SPY is at 156.25 down 0.57 or -0.36%.

The $RUT is at 927.47 down 7 or -0.73%.

NASDAQ is at 3244 down 10 or -0.31%.

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 down.

How Oil Really Gets Priced

WTI oil is trading between 97.30 and 95.95 today. The session bias is neutral to bullish and is currently trading down at 96.54.

More Widening For The Brent/WTI Spread Ahead?

Brent crude is trading between 110.35 and 109.45 today. The session bias is bearish and is currently trading down at 109.78.

Gold fell from 1602.75 earlier to 1563.50 and has since recovered currently trading up at 1575.27.

Here’s why copper has lost its indicator role

Dr. Copper is at 3.36 down from 3.40 earlier.

The US dollar is trading between 83.24 and 82.79 and is currently trading down at 82.84, the bias is currently bearish.

** 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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