April 25th, 2013
in Gary's blogging
Opening Market Commentary For 04-25-2013
Premarkets were up in the +0.50% to the German DAX at +0.75. After the report of US initial jobs claims falling the futures eased up further and then rolled back to the earlier numbers.
Markets opened in the green but quickly tumbled into the flat zone, but the DOW was 20 points higher than yesterday's close along with the SP500 at plus 6 points.
By 10 am it appears we will have another sideways trading session. The gains were made at the opening as Mr. Market has done for the past several sessions. One day at a time.
The SP500 seem to have legs of its own at the opening as it continued to melt upwards along with the small caps. Volume was low to moderate and not giving this session's rise much credibility. This volume fall off is to be expected IF we are actually approaching a top as investors are becoming increasingly more cautious. Without a doubt, weakness prevails and it wouldn't all that much to completely spook the markets. Baring any unforeseen negative issues in the next week, I see the markets melting up and testing the previous highs.
9:15 AM Market preview: U.S. stock futures diverge from Europe and are up nicely, supported by a sharper-than-expected fall in weekly jobless claims and amid a tsunami of company results. The S&P Mini is +0.5%. "Earnings are coming in OK, beating expectations, but forward guidance is not so attractive," says Wells Fargo's Erik Davidson. And while valuations are "pretty reasonable," the market "is not priced to perfection."
Any hopes that the S&P would hit a new all time high on horrible initial claims data may have been dashed following a report that initial claims for unemployment insurance dropped from an upward revised 355K (was 352K) to 339K, better than the expected 350K, and down to a nearly fresh five year low.
The RRR** has been narrow at the opening bell for the past several months, over a year actually, and it has been slacking all this week as predicted, up to today any way. 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: Falls to 84% Down From 90% and Secondaries Confirm "Tradable" This might be true, but still above the 75% I think is a bit more reasonable? Hard to believe and challenging to deal with considering current events. 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 14709 up 33 or 0.23%.
The SP500 is at 1585 up 7 or 0.42%.
SPY is at 158.55 up 0.62 or 0.39%.
The $RUT is at 942.26 up 8 or 0.88%.
NASDAQ is at 3289 up 20 or 0.60%.
NASDAQ 100 is at 2849 up 15 or 0.56%. (A lot of analysts are currently watching the 100 for a heads and shoulder formation.)
The longer trend is up, the past months trend is bullish, the past 5 sessions have been bullish and the current bias is bullish.
WTI oil is trading between 90.63 and 91.98 today. The session bias is negative and is currently trading up at 91.59.
Brent crude is trading between 100.96 and 102.38 today. The session bias is positive and is currently trading up at 102.25.
Gold rose from 1425.80 earlier to 1454.64 and is currently trading up at 1450.55.
Dr. Copper is at 3.252 rising from 3.158 earlier.
The US dollar is trading between 83.17 and 82.49 and is currently trading up at 82.87, the bias is currently bullish.
** RRR = Risk Reward Ratio
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Written by Gary