Averages Continue To Melt Up As Volume Falls

April 16th, 2013
in Gary's blogging

Midday Market Commentary For 04-16-2013

The markets opened high and remained in a very tight trading band until close to 12 when there was a slight melting up on low volume now being contributed to the HFT algo computers. The mess in Cyprus, Eurozone, China and the United States hasn't dissipated and there hasn't been any news to the contrary. The whole melting up is market manipulation coming from the Fed's QE, HFT and the big 'Power Brokers' who shake out the 'sheeples'. It is a sad state of affairs, but that is life in the big city if you want to beg for crumbs.

By 1 pm the averages had leveled off at +1.25% but appeared to still have more steam as the HFT computers pump up the volume, so to speak.

Follow up:

No one here at the office is trading and we see today and another charade in the great art of market manipulation.

There is a lot of discussion of WHY gold has taken such a big dump and the following article has one such opinion.


This Gold Slam Is A Massive Wealth Transfer From Our Pockets To The Banks

The most recent gold bear raid has vastly enriched the bullion bankers, once again, at the expense of everyone trying to protect their wealth from global central bank money printing. The central plank of Bernanke's magic recovery plan has been to get everybody back borrowing, spending, and "investing" in stocks, bonds, and other financial assets.  But not equally so - he has been instrumental in distorting the landscape towards risk assets and away from safe harbors.

That's why a 2- year loan to the US government will only net you 0.22%, a rate that is far below even the official rate of inflation. After the two years is up, you are up $44k (interest) but out $260k (inflation) for net loss of $216,000.

That wealth, or purchasing power, did not just vanish: it was taken by the process of inflation and transferred to someone else. This explains, almost completely, why the gap between the rich and everyone else is widening so rapidly, and why financiers now populate the top of every Forbes 400 list.

There is no mystery, just a process of wealth transfer of magnificent and historic proportions; one that has been repeated dozens of times throughout history.

The RRR** has been narrow at the opening bell for the past several months, over a year actually, and unfortunately 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 second quarter, 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 90% and Secondaries Confirm "Tradable" This might be true (and surprising), 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 1:15 is at 14740 up 141 or 0.97%.

The SP500 is at 1571 up 19 or 1.24%. (Testing the 1571 – 1573 area – must go above and stay for the market to go higher.)

SPY is at 157.16 up 2 or 1.32%.

The $RUT is at 920.89 up 14 or 1.51%.

NASDAQ is at 3259 up 43 or 1.33%.

NASDAQ 100 is at 2834 up 40 or 1.32%. (A lot of analysts are currently watching the 100.)

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 86.05 and 86.66 today. The session bias is bullish and is currently trading up at 88.33.

More Widening For The Brent/WTI Spread ahead?

Brent crude is trading between 98.00 and 100.30 today. The session bias is bearish and is currently trading down at 99.46.

Gold fell from 1496.25 earlier to 1327.10 and is currently trading down at 1378.00.

Here’s why copper has lost its indicator role

Dr. Copper is at 3.30 up from 3.20 earlier.

The US dollar is trading between 82.61 and 81.84 and is currently trading down at 81.90, the bias is currently negative.

** 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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