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Weak US Data Softens Markets Along With Falling Volume

April 30th, 2013
in Gary's blogging

Opening Market Commentary For 04-30-2013

Premarkets were gyrating up and down from yesterday's closing prices leaving most investors scratching their heads.

Markets barely opened in the green with the DOW down 12 points on low volume. By the 15 minute mark the bears had taken the reigns pulling the indices down slightly (-0.20%) again leaving investors wondering if this is a start of a session trend. Volume moved to the low to moderate level with the bulls and bears halfheartedly moving back and forth of the opening numbers.

At 10 am the US Consumer Confidence for April rose to 98.1 (See graph below) and the markets reacted in a negative manner but only falling to yesterday's opening prices with red volume next to the anemic “I really don't care' level.

Follow up:

At 9:45 am the Institute for Supply Management-Chicago’s PMI gauge fell to 49.0 in April from 52.4 the month before. Economists expected a slight uptick to 52.5. Readings above 50 point to expansion in the Midwest manufacturing sector, while those below indicate contraction.

The first column is the number reported this morning. The second column is what analysts were expecting and the third column is the previous reporting.

The RRR** has been narrow at the opening bell for the past several months, over a year actually, and looks to be this way all week. 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, safely anyway, 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 87% up From 84% and Secondaries Confirm "Tradable" This might be true, but still above 75% where I think it should be! 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 10:15 is at 14742 down 77 or -0.52%.

The SP500 is at 1588 down 6 or -0.36%.

SPY is at 158.84 down 0.46 or -0.29%.

The $RUT is at 941.14 down 1.26 or -0.13%.

NASDAQ is at 3306 down 1 or -0.04%.

NASDAQ 100 is at 2866 down 0.74 or -0.03%. (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 bearish.

How Oil Really Gets Priced

WTI oil is trading between 94.61 and 93.56 today. The session bias is bearish and is currently trading down at 93.66.

More Widening For The Brent/WTI Spread ahead?

Brent crude is trading between 103.99 and 102.72 today. The session bias is bearish and is currently trading down at 102.75.

Gold fell from 1479.16 earlier to 1464.76 and is currently trading up at 1471.55.

Here’s why copper has lost its indicator role

Dr. Copper is at 3.184 down from 3.247 earlier.

The US dollar is trading between 82.35 and 81.76 and is currently trading down at 81.79, 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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