April 17th, 2013
in Gary's blogging
Opening Market Commentary For 04-17-2013
Premarkets were down -0.50% to 1.00% leaving investors scratching their heads after yesterday's meteoric rise and wondering what will happen today.
The markets did open lower as expected and within 5 minutes started heading downward. My first thought was this will be a good buying opportunity as we still have further up to go to test the recent highs. But as the averages continuing to roll in new lows on relatively moderate to heavy red volume I had to check my buying impulse.
Then the 'dippers' made their mark, but that didn't last long as the red line returned to the morning lows and slowly melted further down.
Personally, I am not trading now, but it appears that one is relatively safe for the very near term to try some swing trades involving a few days as I expect the market to test the recent highs. (If you like to gamble.)
Bank of America posted first-quarter profits of 20 cents a share, missing estimates by two cents. Adjusted revenues of $23.7 billion topped expectations of $23.4 billion. Shares of the second-biggest U.S. bank by assets dipped nearly 3% in pre-market trading.
The RRR** has been narrow at the opening bell for the past several months, over a year actually, and was actually decent today. The continuing trend of low volume 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 is obviously to early for 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 10:15 is at 14627 down 131 or -0.88%.
The SP500 is at 1556 down 18 or -1.14%.
SPY is at 155.63 down 2 or -1.12%.
The $RUT is at 911.08 down 12 or -1.32%.
NASDAQ is at 3220 down 44 or -1.35%.
NASDAQ 100 is at 2795 down 43 or -1.51%. (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 neutral to bearish and the current bias is bearish.
WTI oil is trading between 89.00 and 87.15 today. The session bias is bearish and is currently trading up at 87.76.
Brent crude is trading between 100.52 and 98.58 today. The session bias is bearish and is currently trading down at 98.83.
Gold rose from 1320.57 earlier to 1391.98 and is currently trading sideways at 1392.96.
Dr. Copper is at 3.20 falling from 3.32 earlier.
The US dollar is trading between 81.78 and 82.58 and is currently trading up at 82.56, the bias is currently bullish.
Our friend RogerGErickson said, "Other shoe? More likely Shoeless Joe himself will drop!" on my comment that investors were waiting for the other shoe to drop. This is a crazy market where 'Shoeless Joe' really isn't in this market as the mom and pop investors left back in 2009 and this represents a lost decade of investors.
** RRR = Risk Reward Ratio
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Written by Gary